Professional Coaching for ACCA, CMA, CPA etc. not GST-exempt: Key takeaways from In re Learnfluence Education Private Limited (GST AAR Kerala)

The Kerala Authority for Advance Ruling in In re Learnfluence Education Private Limited (GST AAR Kerala) addressed multiple GST questions arising from the operations of a private coaching institution offering commerce-focused professional programmes. The ruling clarifies when such coaching qualifies as exempt “education services”, how examination fees and study material are treated for valuation, taxability of foreign exchange differences, and GST implications on amounts received from universities.

This article distils the core findings of the ruling, explains the legal reasoning, and highlights the compliance implications for similar coaching and training entities.

Background of the Applicant and Activities Examined

Learnfluence Education Private Limited operates as a private coaching centre based in Kochi. Its primary activities include:

  • Coaching for professional and commerce-oriented qualifications such as:

    • Chartered Accountancy (CA)
    • Association of Chartered Certified Accountants (ACCA)
    • Certified Management Accountant (CMA India and CMA USA)
    • Company Secretary (CS)
    • Certified Public Accountant (CPA USA)
    • Diploma in International Financial Reporting Standards (DipIFRS–ACCA)

  • Integrated programmes where:

    • Professional coaching is combined with undergraduate and post-graduate degree programmes offered by University Grants Commission (UGC) recognised universities (including Jain University and others)
    • Delivery is through classroom and online modes

The assessee approached the Authority seeking advance rulings on five broad issues relating to GST applicability, valuation and exemption.

Scope and Admissibility of Advance Ruling Application

The Authority first considered whether the questions fell within the permissible scope of an advance ruling under Section 95 and Section 97 of the CGST Act, 2017.

Relevant Provisions

Under Section 97(2), an advance ruling may be sought on questions relating to:

  • Classification of goods or services
  • Applicability of notifications
  • Determination of time and value of supply
  • Admissibility of input tax credit
  • Determination of liability to pay tax
  • Requirement of registration
  • Whether an activity amounts to a supply

The Authority noted that:

  1. The assessee is a registered entity under GST.
  2. All questions raised relate to supplies being undertaken or proposed to be undertaken by the assessee.

Accordingly, each of the five questions was admitted as falling within one or more of the clauses of Section 97(2):

  • Question 1 – Exemption of education/training services: applicability of notification and tax liability (Section 97(2)(b) and 97(2)(e)).
  • Question 2 – Treatment of examination and related fees: value of supply and tax liability (Section 97(2)(c) and 97(2)(e)).
  • Question 3 – Tax on study materials: classification, exemption, and tax liability (Section 97(2)(a), 97(2)(b), 97(2)(e)).
  • Question 4 – Forex fluctuation gain/loss: value of supply and whether it constitutes a supply (Section 97(2)(c) and 97(2)(g)).
  • Question 5 – “Redemption of training fee” from universities: classification, exemption and liability (Section 97(2)(a), 97(2)(b), 97(2)(e)).

Issue 1: Are the Professional Coaching and Training Programmes GST-exempt Education Services?

Claim by the Assessee

The assessee contended that:

  • Its programmes prepare students for professional qualifications administered by ACCA, IMA USA, AICPA and similar bodies.
  • These qualifications are recognised and contribute to skill and professional development in finance and accountancy.
  • The coaching should therefore be treated as:
    • “Education as part of a curriculum for obtaining a qualification recognised by any law for the time being in force”; or
    • Vocational education in substance.

On this basis, it claimed exemption under Serial No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Serial No. 66 of Notification No. 12/2017-CT (Rate) exempts specified services under Heading 9992/9963 when provided:

  • By an “educational institution” to its students, faculty or staff, or
  • To an “educational institution” for limited categories of services (transportation, catering, security/cleaning/housekeeping, examination-related services, and supply of online educational journals/periodicals).

The term “educational institution” in paragraph 2(y) of the Notification covers an institution providing:

  1. Pre-school education and education up to higher secondary or equivalent;
  2. Education as part of a curriculum for obtaining a qualification recognised by law;
  3. Education as part of an approved vocational education course.

“Approved vocational education course” is further defined in clause (h) of paragraph 2 with a narrow, specific scope.

Findings of the Authority

  • The assessee is not engaged in:

    • Pre-school or school-level education up to higher secondary; or
    • Any approved vocational education course as defined.

  • On the key limb under clause (ii), the Authority examined:

    • Whether the assessee itself imparted education as part of the formal curriculum leading directly to a qualification recognised by any law; and
    • Whether it conducted examinations or awarded such qualifications.

From the records, the Authority noted: