RATE OF GST ON TRAINING PROGRAMMES CONDUCTED BY INDIAN INSTITUTES OF MANAGEMENTS (IIMs)
The Goods and Services Tax Act,
2017 came into force in India with effect from 1.7.2017.
The Central Government has clarified that there was specific exemption to following
three programs of IIMs
under Sl. No. 67 of notification
No. 12/2017- Central
Tax
(Rate): –
i.
two-year full time Post Graduate Programmes in Management for
the Post Graduate Diploma in Management, to which admissions are
made on the basis of Common
Admission Test (CAT) conducted
by
the Indian Institute of
Management,
ii.
fellow programme in Management,
iii.
five years
integrated programme in Management.
Therefore,
for the period from
1st July,
2017 to 30th January,
2018, GST exemption would
be available only to three
long
duration programs specified above.
The Central Government has also clarified
that Indian Institutes of Managements also provide
various short
duration / short term
programs for which they
award participation
certificate to the executives
/ professionals as they are considered
as “participants”
of the said programmes. These participation certificates
are
not any qualification recognized by law. Such participants are also not considered as students of Indian Institutes of Management. Services provided by IIMs as an educational institution
to such participants is not exempt from GST. Such short duration executive programs attract standard rate
of GST @ 18% (CGST 9% + SGST 9%).
The relevant Circular No.82/2018-GST dated
1.1.2019 is given below for ready reference.
F.
No. 354/428/2018-TRU
Government of India
Ministry of
Finance
Department of Revenue
Tax research Unit
****
Room No. 146,
North Block, New Delhi, the
1st January,
2019
To
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioner of Central
Tax
(All) /
The Principal
Director Generals/ Director Generals (All) Madam/Sir,
Subject: Applicability of GST on various
programmes conducted
by the Indian
Institutes
of Managements
(IIMs) – Reg.
I am directed to invite your attention to the Indian Institutes of Management Act, 2018
which came into force on 31st January, 2018. According to
provisions of the IIM Act, all the IIMs
listed in the schedule to the
IIM Act are “institutions of national importance”. They are
empowered to (i) grant degrees, diplomas, and other academic
distinctions or titles, (ii)
specify the criteria and process for admission to courses or programmes of study, and (iii) specify the academic content of programmes. Therefore, with effect from 31st January, 2018,
all
the IIMs are “educational institutions” as defined under notification No. 12/ 2017- Central Tax (Rate) dated 28.06.2017 as they provide education as a part of a curriculum for obtaining
a qualification
recognised
by
law for the time being in
force.
2. At present, Indian Institutes of Managements are providing various long duration
programs (one year or more) for which they award diploma/ degree certificate duly recommended by Board of Governors as per the power vested in them under the IIM Act,
2017. Therefore,
it is clarified that services provided by Indian Institutes of Managements to
their students- in all such long duration programs (one year or more) are exempt from levy of
GST. As per information received from IIM Ahmedabad, annexure 1 to this circular provides
a sample list of programmes which are of long duration (one year or more), recognized by law and
are exempt from GST.
3. For the period from 1st July, 2017 to 30th January, 2018, IIMs were not covered by the
definition of educational institutions as given in notification No. 12/ 2017 Central Tax (Rate)
dated 28.06.2017. Thus, they were not entitled to exemption under Sl.
No. 66 of the said
notification. However, there was specific exemption to following three programs of IIMs
under Sl. No. 67 of notification
No. 12/2017- Central
Tax
(Rate): –
(i) two-year full time Post Graduate Programmes in Management for
the Post Graduate Diploma in Management, to which admissions are
made on the basis of Common
Admission Test (CAT) conducted
by
the Indian Institute of
Management,
(ii) fellow programme in Management,
(iii)five years integrated
programme in Management.
Therefore, for
the period from 1st July, 2017 to 30th January, 2018, GST exemption would be available only to three
long
duration programs specified above.
4. It is further, clarified that with effect from 31st January, 2018, all IIMs have become eligible for exemption benefit under
Sl.
No. 66 of notification No. 12/ 2017- Central Tax (Rate)
dated 28.06.2017. As such, specific exemption granted to IIMs vide
Sl.
No. 67 has become redundant. The same
has
been deleted vide
notification No. 28/2018- Central Tax (Rate) dated,
31st December, 2019 w.e.f. 1st January 2019.
5. For the period from 31st January, 2018 to 31st December, 2018, two exemptions, i.e.
under Sl. No. 66 and under Sl. No. 67 of notification No. 12/ 2017- Central Tax
(Rate), dated
28.06.2017 are available to the IIMs. The
legal position in such situation has been clarified by Hon’ble Supreme Court in many cases that if there are two or more exemption notifications available to an assessee, the assessee can claim the one
that is more beneficial to him.
Therefore, from 31st January, 2018 to 31st December,
2018, IIMs can avail exemption either
under Sl. No 66 or Sl. No.
67 of the said notification for
the eligible programmes. In this
regard following case laws may be referred-
i. H.C.L. Limited
vs Collector of
Customs [2001 (130) ELT 405 (SC)]
ii. Collector of Central Excise, Baroda vs Indian Petro Chemicals [1997 (92) ELT 13
(SC)]
iii. Share Medical Care vs
Union of India reported at 2007 (209) ELT 321 (SC)
iv. CCE vs Maruthi Foam (P) Ltd. [1996 (85) RLT 157 (Tri.) as affirmed by Hon’ble
Supreme Court vide 2004 (164) ELT 394 (SC)
6. Indian Institutes of Managements also provide various short
duration/ short term
programs for which they
award participation
certificate to the executives/ professionals as
they
are considered
as “participants”
of the said programmes. These participation certificates
are
not any qualification recognized by law. Such participants are also not considered as students of Indian Institutes of Management. Services provided by IIMs as an educational institution
to such participants is not exempt from GST. Such short duration executive programs attract standard rate
of GST @ 18% (CGST 9% + SGST 9%). As per information
received from IIM Ahmedabad, annexure 2 to this circular provides a sample list of programmes which are short duration executive
development programs, available for
participants other than students and are not
exempt from
GST.
7. Following summary table may be referred to while determining eligibility of various programs conducted by Indian Institutes
of Managements for exemption from
GST.
|
Sl.
No.
|
Periods
|
Programmes offered by Indian Institutes of
Management
|
Whether
exempt
from
GST
|
|
(1)
|
(2)
|
(3)
|
(4)
|
|
1
|
1st July, 2017
to
30th January,
2018
|
i. two-year full time Post Graduate Programmes
in Management
for the Post Graduate Diploma
in Management, to which admissions are made
on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management,
ii. fellow programme in Management,
iii. five
years integrated programme
in
Management.
|
Exempt from
GST
|
|
i. One- year Post Graduate Programs
for
Executives,
ii. Any programs other than those mentioned at
Sl. No. 67 of notification No. 12/2017- Central Tax (Rate), dated
28.06.2017.
iii. All short duration
executive development
programs or need based specially designed programs
(less than one year).
|
Not exempt
from GST
|
||
|
2
|
31st January,
2018 onwards
|
All long duration programs (one year or more)
conferring
degree/ diploma as recommended by
Board
of Governors as per the power vested in them
under the IIM Act, 2017 including one- year
Post Graduate Programs for Executives.
|
Exempt from
GST
|
|
|
|
All short duration
executive
development
programs or need based specially designed
programs (less than one year) which are not
a qualification recognized
by
law.
|
Not exempt
from GST
|
8. This clarification applies, mutatis mutandis, to
corresponding entries of respective
IGST, UTGST, SGST exemption notifications. Difficulty if any, in the implementation of this
circular may be brought to
the notice of the Board.
Yours Faithfully, Susanta Mishra
Technical
Officer
(TRU)
Tel: 011-23095558
Annexure 1: (Programmes
exempt under GST Law)
The IIM- Ahmedabad refers such persons as their students who attend long
duration programmes offered by the Institute for which diplomas / degrees are awarded by the Institute. These programmes are awarded based on the recommendation by the Board of Governors as per
the power vested in them under
the IIM Act, 2017. Such
programmes are:
1. Post-Graduate
Programme (PGP) – 2-year program
2. Post-Graduate
Programme in
Food and Agri-Business
Management (PGP-FABM) –
2-year
program
3. Fellow Programme in
Management (FPM) – 4 to 5-year
program
4. Post-Graduate Programme in Management for Executives
(PGPX) – 12 months (1 year) full time
program
5. ePost-Graduate Programme
(ePGP) – 2-year online program.
This list is an example of long duration programs recognised under IIM Act, 2017 offered by
IIM
Ahmedabad. Similar programs offered by other IIMs of India may kindly be referred by IIMs and
tax authorities
during assessment.
Annexure 2: Programmes not exempt under
GST
Law
The executives / professionals
doing short term courses
(less than one year) are considered
as “participants”
of the programmes of the
IIM Ahmedabad:
1. Armed
Forces
Programme
2. Faculty Development Programme
3. Executive Education
a. Customized Executive Programmes
b. Open
Enrolment Programme
This list is an example of short duration executive
development programs offered by IIM Ahmedabad which are available to participants. Similar programs offered by
other
IIMs of India may kindly be referred by IIMs and
tax authorities
during assessment.
***