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CA Intermediate · Taxation · Exemptions from GST

Shree Vidya Trust, a registered charitable trust, runs a school in Pune providing pre-school education. It also lets out a hall to a local company for corporate training at ₹40,000 per month. Which statement about GST on these supplies is correct, assuming the school's services are not otherwise taxable?

Pre-school education services by the school are exempt from GST, but renting out the hall to a company for corporate training is a separate taxable supply. Exemption depends on the nature of the service, not on the supplier being a charitable trust.

  1. ABoth the education services and the hall rental are exempt, because the supplier is a charitable trust
  2. BEducation services by the school are exempt, but the hall rental to the company is a taxable supplyCorrect
  3. CBoth are taxable, since the trust is not an educational institution
  4. DEducation services are taxable, whereas hall rental is exempt because it is by a trust

Explanation

Services by an educational institution providing pre-school education are exempt under the services exemption notification. Renting of a hall to a company for business training is a separate supply not covered by that exemption, and a trust's status does not exempt it. Exemption attaches to the nature of the supply, not the supplier alone, so the first option is wrong.

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