GST exempt for IIM Indore’s Executive Post Graduate Program in Management
Facts and Issue of the case
Indian Institute of Management Indore (referred as “Appellant” for brevity) is one of the nineteen Indian Institute of Managements set up to provide high quality management education in India. Appellant was established in 1996 by Government of India as a registered Society under Madhya Pradesh Societies Registration Act. 1973 and is governed by a Board of Governors (BoG).Appellant is providing various types of courses, some of which are explicitly exempted under GST by virtue of entry no. 67 of Notification 12/2017 – Central Tax (Rate) dated 28-Jun-2018 with no specific exemption to fees towards other courses including Executive Post Graduate Programme (EPGP).
The Executive Post Graduate Programme in Management (EPGP) is an intensive one-year full time academic programme of IIM lndore. It consists of a fully developed curriculum of core & elective courses which is approved by the academic council of the Institute. Participants who meet the academic requirement are awarded Executive Post Graduate Diploma at the annual convocation of the Institute alongwith other degree & diploma programmes. It is a diploma course specially designed to enhance knowledge, skills and capabilities essential for managing and leading organizations, the programme combines skill building with exploration of good management practices.Notification No. 11/2017-Central Tax (Rate) provides for CGST rate of tax on intra-supply CGST rate with similar rate in SGST, thereby effective rate being 18% (9%+9%).
Grounds of appeal
1.The advance ruling issued by learned AAR is arbitrary and devoid of merit and substance and passed without appreciation of facts of the case.
2. The learned AAR failed to acknowledge that Appellant is empowered to grant degrees, diplomas and other academic distinctions or titles by virtue of section 7(f) of UM Act, 2017 promulgated w.e.f. 31-Jan-2018.
3. The learned AAR failed to :
a. Consider that after enactment of JIM Act, 2017, Appellant is squarely covered under definition of educational institution and
b. Conclude status of Appellant under definition of ‘educational institution’ to fall under the ambit of Entry No. 66.
4. The learned AAR misconstrued the exemption entry (ie) 66 and 67 to the extent that once Appellant qualifies to be an ‘educational institutions’ entry 67 will not apply. (para 5.5 of advance ruling referred)
5. The learned AAR has further erred in applying principle of strict interpretation’ (sic), as ‘rule of strict construction’ can be applied only when there is ambiguity in interpretation, which is not in the instant case.
6. The learned AAR failed to appreciate that :
a. Before enactment of IIM Act, 2017, there was only a single exemption for Appellant in entry no. 67 of Notification No. 12/2017-CT(Rate) and education services provided by IIM were not covered under general exemption provided in entry no. 66.
b. However, post enactment of IIM Act, 2017, Appellant clearly falls within the parameters of exemption clause 66 uin 12/2017-CT(Rate) read with definition to the notification.
7. As per language of notification no. 12/2017(CTR), Appellant is clearly covered under the aegis of “educational institution” as post enactment of IIM Act, 2017, the qualification conferred by it is recognized by the law in force, namely TIM Act, 2017.
Observation by the court
The court have gone through the records in detail and have taken into consideration all the submissions made by the Appellant. The short point for determination is whether the course Executive Post Graduate Programme in Management (EPGP), after enactment of IIM Act, 2017 is exempted from GST.
The AAR in his order dated 10-08-2018 has decided that Executive Post Graduate Programme in Management (EPGP) will not be eligible for exemption from GST as the same has been categorically excluded from exemption under entry no. 67 to the notification no. 12/2017-Central Tax (Rate) and corresponding notification under MPGST ACT, 2017. The AAR also clarified that the Executive Post Graduate Programme in Management (EPGP) conducted by the applicant shall be chargeable to GST, irrespective of enactment of IIM Act. 2017.Government of India, Ministry of Finance, Department of Revenue, Tax Research Unit has issued Circular no. 82/01/2019-GST dated 01-01-2019 regarding applicability of GST on various programmes conducted by the Indian Institute of Managements (IIMs).For the sake of clarity, we reproduce the relevant portions of the circular which have a bearing on the issue at hand.
The Executive Post Graduate Programme in Management (EPGP) which is an intensive one year full time academic programme of IIM Indore, is a diploma course specially designed to enhance knowledge, skills and capabilities essential for managing and leading organizations.
Participants who meet the academic requirement are awarded Executive Post Graduate Diploma at the annual convocation of the institute alongwith other degree and diploma programmes. In the light of circular no. 82/01/2019-GST from 31st January, 2018 onwards, the one year full time Executive Post Graduate Programme in Management (EPGP) of IIM Indore is exempt from GST.