Karnataka AAR: Income from Guest Lectures Attracts 18% GST

The Karnataka Authority for Advance Ruling (AAR) ruled that the income earned from providing guest lectures will attract 18% Goods and Services Tax (GST). The applicant, Mr Sairam Gopalkrishna Bhat, is a Law Professor at the Bengaluru National Law School.

He approached the AAR seeking clarity on whether the income from giving guest lectures falls under the supply of taxable services. Also, the applicant enquired whether the income earned from research training projects funded by Central and State Ministries attracts GST.

AAR considered the Supreme Court ruling in Loka Shikshana Trust, where ‘education’ was defined as a process of training and developing knowledge, skill and character of students by normal schooling.

After considering all the facts, AAR mentioned that services by training or coaching in recreational activities relating to arts or culture or sports by charitable entities are exempted from GST. However, the applicant provides guest lectures on law and legal awareness, not arts and culture.

The AAR ruled that the said service falls under another professional, technical and business services, and they do not fall under the exempted services category.

AAR pointed out that services provided to the Centre, State government, Union Territory Administration, under any training programme for which the Centre/State/UT bears total expenditure will attract ‘NIL’ GST, but only after fulfilling two conditions. The conditions are: 

  1. Training services are provided only to the Centre, State Government and Union Territory Administration.
  2. Expenditure has to be borne by the Centre, State Government and Union Territory Administration.

AAR noticed that the applicant had provided a copy of the MoU signed between the Central Environment Ministry and Centre for Environmental Law, Education, Research and Advocacy (CEERA). However, AAR highlighted no contract between the Central Ministry and the applicant.

Hence, the AAR also ruled that training services provided by the applicant attract a GST of 18%. The AAR ruling would mean that service professionals whose turnover exceeds Rs 20 lakh will have to pay 18% GST on income from giving guest lectures.

This ruling will create a burden for millions of freelancers, researchers, academicians, professors and others who share knowledge as guest lectures on payment of consideration. Also, the individuals working part-time as tutors, mentors and instructors would need to revalidate their liability to pay GST post this ruling.

For any clarifications/feedback on the topic, don’t hesitate to contact the writer at dvsr.anjaneyulu@cleartax.in.

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