Order Date – 13 July 2023

Facts – 

• The Appellant, M/s. Isha Foundation, is a Public Charitable Trust engaged in promoting education, yoga, meditation and other charitable objectives.
• The Applicant states that they are desirous to run Isha Samskriti, a gurukul style of residential school which seeks to impart traditional Bharatiya style of education to children between ages of 7 and 18. The objective of this form of education is to nurture the human being so that his body, mind and energies are able to grow to the fullest extent.
• The main subjects taught in the school are Sanskrit and English language, Indian classical music (Carnatic and Hindustani), Indian classical dance( Bharatnatyam and other forms), Kalaripayattu, Yoga and basic arithmetic; that extracurricular activities including football, volleyball and treks will be conducted.; that school will not issue any certificate of education but students have the option to appear for National open school examination at class 10 and 12 level.

Issue – 

• Whether the Education being provided by the applicant is exempt under Notification No. 9/2017-Integrated Tax (Rate) dated 28th June 2017?

Order – 

• The AAR observed that Applicant are registered under section 12AB of the Income-Tax Act 1961 and they have submitted a copy of order for registration in Form No. 10AC supporting the same. Thus the applicant satisfy the condition to Notification No. 9/2017-Integrated Tax (Rate) dated 28th June 2017.
• On going through the objectives of the trust it is observed that it mentions 'spreading of knowledge and practice of yoga, meditation and other related fields' and spreading of education and also other objectives like relief to poor, medical relief etc as their other objectives. However, there is no mention of any words like advancement of religion or spirituality.
• It was also observed that once the student completes 10 years of education (or till they attain 18 years), they can become professional dancers, musicians or yoga/kalaripayat teachers, but does not talk anything about being spiritual. In view of the above, it is observed that the Applicant is not providing any services relating to advancement of religion, spirituality and yoga. 
• Hence, the Applicant has failed to prove that the services provided by them through 'Isha Samskriti', a gurukul style of residential school does not qualify to be 'charitable activities' as defined in the notification and therefore not eligible to claim exemption as per entry 1 of the Notification No. 9/2017-Integrated Tax (Rate) dated 28th June 2017.
• The Applicant is neither providing pre-school education nor education up to higher secondary school and they are following their own curriculum. In view of the above the Applicant is not covered under the definition of “educational institution” as per Notification No. 9/2017-Integrated Tax (Rate) dated 28th June 2017 and hence cannot claim exemption as per entry no. 69 of the same notification.