The AAAR, Tamil Nadu in Tvl. Batcha Noorjahan (Miss School Transport) [A.R. Appeal No. 02/2025/AAAR, dated June 23, 2025] held that school‑bus services paid directly by students’ parents do not qualify for exemption under Serial No. 66 of Notification 12/2017- Central Tax (Rate) because the services are neither provided by an educational institution nor to an educational institution.
Facts:
Tvl. Batcha Noorjahan (“the Appellant”) operates “Miss School Transport,” plying buses exclusively for schoolchildren under long‑term agreements with schools. The Appellant, generates e‑invoices and e‑way bills for each trip, and collects transportation charges directly from parents.
The Appellant filed an Advance ruling before the Tamil Nadu AAR with regard to exemption of tax under S.No 66 of the Notification No. 12/2017 Central Tax (Rate). The Tamil Nadu Authority for Advance Ruling (“AAR”) ruled that the exemption is inapplicable because consideration is paid by parents, not by the school. Aggrieved, the Appellant filed an appeal before the AAAR, raising seven grounds, chiefly that the school controls the service and that payment mode should not affect exemption eligibility.
Issue:
Whether school‑bus transportation supplied by the Appellant, with consideration paid directly by parents, is exempt from GST under Serial No. 66 of Notification 12/2017‑Central Tax (Rate) on June 28, 2017?
Held:
The AAAR, Tamil Nadu in A.R. Appeal No. 02/2025/AAAR held as under:
- Observed that, Serial No. 66 exempts transportation of students, faculty and staff only when the service is provided by an educational institution or to an educational institution.
- Noted that, the Appellant is the supplier, and the parents as they pay the consideration, are the recipients. Therefore, the school neither renders nor receives the service.
- Held that, receipt of payment directly from parents effectively rules out the role of the school. Hence the transaction falls outside Serial No. 66 of said Notification.
- Further held that the AAR’s ruling is affirmed and the Appellant’s services remain taxable.
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