Order Date – 15 May 2023

Parties: Mody Education Foundation Vs Commissioner of Central Excise, Jodhpur

Facts –

• The Appellant, Mody Education Foundation, runs a boarding school called “Mody School‟, receives hostel fees from the students, in addition to the tuition fee and other charges. The appellant has also rented out a building to M/s. Mody University of Science and Technology and has received rent for the period 2014-15. The appellant has also provided transportation services to its students and staff. The appellant has also received goods transport agency services.
• A show cause notice dated 20.09.2016 was issued to the appellant proposing a demand of service tax on hostel services provided being an auxiliary education services, was not exempted under Serial No. 9 of the Notification dated 20.06.2012 during the period 01.04.2013 to 10.07.2014 also proposed demand on rent received, transportation service provided and GTA services.

Issue –

• Whether the appellant is required to pay service tax?

Order –

• The Tribunal observed that the students who are receiving education services, may or may not opt for hostel services. There is, therefore, a nexus between the two services. It cannot, therefore, be doubted that the hostel services and education services provided by a boarding school are naturally bundled in the ordinary course of business, and the education service is the service which gives the essential character to such bundle.
• In this connection reference can also be made to paragraph 4.12.4 of the CBIC Education Guide dated 20.06.2012. Further Section 66D of the Finance Act provides for the negative list of services and it includes service by way of pre-school education and education up to higher secondary school or equivalent. Thus, education service would be covered within the purview of negative list contained in section 66D of the Finance Act. It would, therefore, not be taxable.
• In this view of the matter, it may not be necessary to examine the remaining contentions advanced by the learned counsel for the appellant regarding the exemption granted under serial no. 18 of the notification dated 20.06.2012. Hence the appeal is allowed.