In Service Tax Appeal No.75767 of 2021 – CESTAT - Sale of books/publications not considered as part coaching services, Kanhaiya Singh Vision Classes Private Limited not liable to Service Tax: CESTAT (Kolkata)
Members P.K. Choudhary (Judicial) & K. Anpazhakan (Technical) [18-05-2023]

Read Order: Kanhaiya Singh Vision Classes Private Limited v. Commissioner of CGST & CX

LE Correspondent

Kolkata, May 20, 2023: The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal has ruled that the value of the sale of books/publications by Kanhaiya Singh Vision Classes Private Limited (appellant) was not liable to service tax.

In the case at hand, the appellant was involved in providing coaching services for competitive entrance examinations into engineering and medical institutes. The appellant received a show cause notice from the department alleging non/short payment of service tax on coaching services. The department claimed that the appellant artificially bifurcated the consideration received for coaching services into other categories such as income from bag trade, sale of I cards, sale of prospectus/form, and publication section. In response to the show cause notice, the appellant argued that the value of the sale of books should not be considered as part of the value of coaching services. They cited Notification No. 12/2003-ST dated 20.06.2003, stating that the sale of goods cannot be taxed as per the notification.

The bench of P.K. Choudhary (Judicial) and K. Anpazhakan (Technical) observed that the Tribunal in the case of Smart Value Products & Services Ltd. Vs. Commissioner of Central Goods & Service Tax, Noida [LQ/CESTAT/2018/51] has held that in light of the decision in the case of Chate Coaching Classes Pvt. Ltd v. Commissioner of Central Excise, Aurangabad [LQ/CESTAT/2012/708], the amount collected by the appellant by selling of study material was not taxable service under the Finance Act, 1994.

The bench noted that the value of the sale of books was separately identifiable from the audited financial statements and that sales were made to both students and third parties. Therefore, the levy of service tax on the sale of books/publications was deemed unjustified.