Collection and Payment of examination fee by an assessee to an academy outside India on behalf of the students who are enrolled for training as well as on on behalf of outside students without collecting any service charge as a pure agent is not liable to GST

Facts

The applicant is engaged in providing training for students in medical coding exam conducted and certified by American Academy of Professional Coders [AAPC].

The applicant also helps some of their students to pay examination fee for the medical coding examination conducted by AAPC by arranging an online facility/platform for making payment without collecting any service charge. This service is also available to outside students.

The applicant seeks advance ruling on the following questions:

• Whether examination fees paid on behalf of students as a pure agent without any service charge is liable to GST?
• Whether examination fees paid on behalf of outside students as a pure agent without any service charge is liable to GST?

Rule 33: The expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,

• The supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorization by such recipient;
• The payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service;
• The supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account.

Ruling: The collection and payment of examination fee to AAPC by the applicant on behalf of the students who are enrolled for training with the applicant is not liable to GST subject to fulfilment of the conditions stipulated under Rule 33 of CGST Rules 2017.
The collection and payment of examination fee to AAPC by the applicant on behalf of outside students (who are not enrolled for training with the applicant) without collecting any service charge either from students or AAPC is not liable to GST since the facilitation service is being made without consideration, it falls outside the meaning and scope of supply as defined in Section 7 of the CGST Act, 2017.

Shikhar Verma, Articled Assistant, SW India