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K. Vaitheeswaran
K.VAITHEESWARAN & CO.
ADVOCATES & TAX CONSULTANTS
Flat No.3, First Floor, No.9, Thanikachalam Road, T. Nagar, Chennai - 600 017. 402, Front Wing, House of Lords, 15/16, St. Marks Road, Bangalore 560 001
Mobile: 98400-96876
E-mail : askvaithi@yahoo.co.uk
K. Vaitheeswaran & Co.
LEGISLATION
No separate Service Tax Act. Still governed by Finance Act, 1994 and Rules made there under. Law has grown too fast with frequent changes. No longer an assessee friendly legislation. Multiple wings in action. DGCEI, Intelligence, Audit and Assessment.
K. Vaitheeswaran & Co.
40000
37596.88
10000
3305.44
0
1994-95 1995-96 1996-97 1997-98 1998-99 1999- 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 20072000 08(R) 200809(B)
ISSUES IN COLLECTIONS
Fastest growing tax Phenomenal collections Adjudication process Revision Judicial precedents Collection targets Vs. Fair Adjudication
RECOGNIZED BY LAW?
Any institute or establishment which issues any certificate or diploma or degree or any educational qualifications recognized by law for the time being in force. It does not limit the recognition only to institutes in India. The objective of the exclusion in the definition is to exclude school, graduate and post-graduate teaching institutes and establishments from service tax.
RECOGNIZED BY LAW?
In the case of Ohi-Manipal School of Business Vs. Commr. of S.T (2008) 10 STR 44 , the Appellant is a business school/Institute offering 18 months MBA Programme Course with affiliation with M/s. Ohio University of USA and Manipal Education Network. The Bangalore Tribunal has granted absolute stay and waiver of pre-deposit and observed that On a prima facie consideration, the exclusion clause of the definition would bring into consideration the present applicant. Although, there is no specific recognition given to the Appellants by the Government, yet the course material granted by them prima facie cannot be considered to be coming within the category of commercial training or coaching centre.
NON-PROFIT ORGANIZATION
The Bangalore Tribunal in the case of Administrative Staff College of India Vs. CCE (2007) 6 STR 319 has granted absolute stay and waiver of pre-deposit since the Appellant is a registered as a society and functioning as non-profit organisation and the activity of training provided to candidates selected by Central and State Governments will not attract service tax under the category of Commercial Training or Coaching Centre.
K. Vaitheeswaran & Co.
CHARITABLE TRUST
In the case of Great Lakes Institute of Management Ltd Vs Commissioner of Service Tax (2008) 10 STR 2002 the Appellant was a charitable trust registered under Section 12AA of the Income Tax Act 1961, imparting post graduate programmes in Management, which were not recognized under any law for the time being in force and was collecting course fees towards imparting such Management programmes. The Chennai Tribunal held that such an activity does not fall within the ambit of commercial training or coaching centre
K. Vaitheeswaran & Co.
CHARITABLE TRUST
The Income Tax exemption is granted by the Director of Income Tax (Exemption) and the income is exempt from income tax under Section 11. Section 11 provides for an exemption in respect of income derived from property held under Trust for charitable or religious purposes. In terms of Section 2(15) of the Income Tax Act, charitable purpose includes relief of the poor, education, medical relief and the advancement of any other general public utility.(Impact of amendment by Finance Act 2008) educational institutions created under trust qualify for income tax registration only when the Income Tax Authorities are satisfied that the trust has been formed for charitable purposes for the purpose of recognition and exemption under Income Tax Law.
K. Vaitheeswaran & Co.
CHARITABLE TRUST
Even assuming, this degree is not considered as recognized by law, the fact that the Trust has got Section 12A registration will insulate the position that it is not a commercial training centre and the ratio of the Great Lakes Institute of Management would squarely apply.
VOCATIONAL TRAINING
Notification No.24/2004 exempts vocational training. Vocational training institute means a commercial training or coaching centre, which provides vocational training or coaching that imparts skills to enable the trainee to seek employment or undertake self-employment directly after such training or coaching.
WHAT IS VOCATIONAL?
When the exemption was originally introduced in 2003 the Board vide Circular dated 20.06.2003 had clarified as under: vocational coaching and training services provided by typing and shorthand institutes, TV / vehicle repair training institutes, tailoring institutes, industrial training institutes, foreign language institutes, computer training centres, hobby classes, institutes teaching martial arts, painting, dancing, etc. would not be chargeable to service tax .
K. Vaitheeswaran & Co.
WHAT IS VOCATIONAL?
The Kerala High Court in the case of CIT Vs. George Thomas (97 ITR 111) has held that anything in which a person is engaged systematically can be an occupation or vocation. This decision has been affirmed in appeal in 156 ITR 412 by the Supreme Court.
RECREATIONAL
Notification No.24/2004 exempts Recreational Training Institutes. Recreational training institute means a commercial training or coaching relating to recreational activities such as dance, singing, martial arts or hobbies.
RECREATIONAL
The Tribunal in the case of Fast Arithmetic Vs. CCE (2006) 4 STR 59 has held that teaching mental arithmetic using abacus a plastic instrument is fun and relaxation and prima facie in the nature of recreational activity. Pre-deposit waived in the case of K.K. Academy Vs. CST (2008) 10 STR 117 .
SPECIFIC EXCLUSION
The Tribunal in the case of Dewsoft Overseas Pvt. Ltd. Vs. CST (2008) 16 STT 376 has held that online computer courses is covered under commercial training and coaching. Notification No.24/2004 provides that the Notification shall not apply in respect of services provided by a computer training institute. Computer training institute means a commercial training or coaching centre which provides coaching or training relating to computer software or hardware.
CONCLUSION
Education should not be taxed Government should not see Goddess Lakshmi through Goddess Saraswathi. Service tax at 12.36% is a prohibitive cost ultimately borne by the society without cenvat credit.
K. Vaitheeswaran
Thank you