The Gujarat Authority for Advance Ruling (GAAR) has clarified that transportation and catering services for school students do not qualify for GST exemption under Serial No. 66(b)(i) and (ii) of Notification No. 12/2017-Central Tax (Rate) when fees are collected directly from parents instead of the educational institution.
The ruling arose from a case involving services provided exclusively to students and staff of a Surat-based higher secondary school. While the school’s managing trust had entered into agreements for both transportation and catering, the charges for student services were billed directly to parents, whereas staff services were invoiced to the school or trust.
GAAR held that for the exemption to apply, services must be rendered to the educational institution itself, with the institution making payment. Direct billing to students or parents breaks this requirement, making the services taxable.
The authority also refused to entertain a related query on refund eligibility for taxes paid in earlier years, noting that refund issues do not fall within the scope of Section 97(2) of the CGST Act, 2017.
In addition, a request to alter the applicant’s legal name in the ruling due to a recent change in business structure was rejected, as the application had been filed under the original entity name.
The AAR held that GST exemption applies only if the educational institution itself is the recipient and payer for services. Direct billing to students disqualifies services from exemption. Contractual and payment arrangements are critical in determining tax treatment.
Ruling Details
Applicant’s Name: M/s Protego Services LLP
Ruling Date: 26/06/2025
