No Service Tax on sale of coaching material


The CESTAT Kolkata in the matter of M/s. Kanhaiya Singh Vision Classes Private Limited v. Commissioner of CGST & CX, Patna-I Commissionerate [Service Tax Appeal No.75767 of 2021 dated May 18, 2023] has held that the amount collected by selling study material is not a taxable service under the Finance Act, 1994, hence, no service tax leviable on sale of coaching material.


M/s. Kanhaiya Singh Vision Classes Pvt. Ltd. (“the Appellant”) is engaged in providing coaching services to the aspiring students for qualifying the competitive entrance examinations into the engineering/medical institutes and also sells study material.

The Appellant was issued with a Show Cause Notice dated September 24, 2018 (“the SCN”) alleging short payment of service tax on coaching services by artificially bifurcating the consideration received towards coaching services in other categories such as Income from sale of bag, sale of Identity card, sale of prospectus and sale of books.

The Appellant had replied to the SCN by stating that the value of sale of books cannot be included in the value of coaching services as the same is sale of goods and cannot be taxed as per the Notification No. 12/2003-ST dated June 20, 2003.

The Adjudicating authority vide an Order dated March 17, 2021 confirmed the demand of Service tax with equivalent penalty.


Whether income from sale of books must be added in the consideration for coaching services?


The CESTAT, Kolkata in Service Tax Appeal No.75767 of 2021held as under are:

  • The Tribunal in various decisions held that the value of books cannot be included in the consideration for coaching services.
  • Relied upon the judgement of M/s Chate Coaching Classes Pvt. Ltd. 2013 (29) S.T.R 138 “the amount collected by the Appellant selling of study material is not taxable service under the Finance Act, 1994”.
  • The value of book sales is separately identifiable from the Appellant audited financial statements, and there are documents to show that such sales were made not only to students but also to third parties.
  • Hence, the appeal is allowed and held that no service tax leviable on sale of coaching material.

(Author can be reached at [email protected])

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CA Bimal Jain
A2Z Taxcorp LLP is a boutique Indirect Tax firm having its offices at New Delhi and Guwahati specializing in GST, Central Excise, Custom, Service Tax, VAT, DGFT, Foreign Trade Policy, SEZ, EOU, Export – Import Laws, Free Trade Policy, etc. It is a professionally managed firm having a team of experienced and distinguished Chartered Accountants, Company Secretary, Lawyers, Corporate Financial Advisors and Tax consultants to provide various services like litigation and representation, transaction advisory, diagnostic reviews/ health checks, audit defense & protection, retainership & compliance, configuration of tax efficient business model etc. Its clientele consists mainly of Foreign MNC, large/mid-sized Indian companies which includes exporters, FMCG, consumer durables, automobiles, aerated beverages, ceramic tiles, real-estate, hospitality, etc. Our clients include Varun Beverages Limited, Kajaria Ceramics Limited, L.G. Electronics India Private Limited, Shipra Hotel Limited, Multani Pharmaceuticals Limited, Shangri-La Eros Hotel etc. Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase–I, Delhi – 110091 India Desktel:+91-11-42427056 Mobile:+91 8076563802 [email protected]
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