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CA Intermediate · Taxation · Exemptions from GST

Vidya Trust runs a charitable educational institution in Lucknow providing pre-school education up to higher secondary. During the year it receives Rs 12,00,000 as tuition fee from students, Rs 3,00,000 as fee for conducting entrance-coaching classes for outside candidates, and Rs 1,50,000 for renting its auditorium to a private company for a corporate event. Considering only these receipts and assuming no other exemption applies, what is the value on which GST is chargeable?

GST is chargeable on Rs 4,50,000. Tuition from the institution's own students is exempt, but coaching for outside candidates (Rs 3,00,000) and renting the auditorium to a company (Rs 1,50,000) are taxable supplies that are outside the education exemption.

  1. ARs 15,00,000
  2. BRs 4,50,000Correct
  3. CRs 1,50,000
  4. DRs 3,00,000

Explanation

Services by an educational institution to its students are exempt, so the Rs 12,00,000 tuition fee is exempt. Coaching for outside candidates is not a service to students of the institution's recognised course, so it is taxable at Rs 3,00,000. Renting the auditorium to a company for a corporate event is also taxable at Rs 1,50,000. Taxable value = 3,00,000 + 1,50,000 = Rs 4,50,000. Rs 1,50,000 omits coaching; Rs 3,00,000 omits the auditorium.

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