Blog on Circular No. 82/01/2019-GST: GST Applicability on IIM Programs

2025-03-03 09:52:06 02March

02March

Blog on Circular No. 82/01/2019-GST: GST Applicability on IIM Programs

<h4>Introduction</h4>The Central Board of Indirect Taxes and Customs (CBIC) issued Circular No. 82/01/2019-GST on January 1, 2019, to clarify the applicability of GST on various programs conducted by Indian Institutes of Management (IIMs). With the implementation of the IIM Act, 2018, all IIMs were granted the status of "institutions of national importance" and given the power to award degrees and diplomas. This circular outlines which programs are exempt from GST and which programs attract GST.<hr><h3>Key Highlights of the Circular</h3><h4>1. GST Exemption on Long-Duration IIM Programs (One Year or More)</h4><ul><li>With effect from January 31, 2018, all IIMs qualify as educational institutions under Notification No. 12/2017-Central Tax (Rate).</li><li>Programs that provide degrees or diplomas recognized by law are exempt from GST.</li><li>Examples of GST-exempt programs:<ul><li>Post Graduate Programme (PGP) – 2 years</li><li>Post Graduate Programme in Food & Agri-Business Management (PGP-FABM) – 2 years</li><li>Fellow Programme in Management (FPM) – 4-5 years</li><li>Post Graduate Programme in Management for Executives (PGPX) – 12 months</li><li>ePost-Graduate Programme (ePGP) – 2 years (online)</li></ul></li></ul><h4>2. GST Applicability on Short-Term IIM Programs</h4><ul><li>Short-term programs (less than one year) that provide certificates of participation (not degrees or diplomas) are subject to GST at 18% (CGST 9% + SGST 9%).</li><li>Such programs do not qualify as education under GST exemption rules.</li><li>Examples of taxable programs:<ul><li>Executive Education (Customized & Open Enrollment Programs)</li><li>Faculty Development Programs</li><li>Armed Forces Programs</li></ul></li></ul><h4>3. GST Applicability for IIMs Between July 1, 2017, and January 30, 2018</h4><ul><li>Before the IIM Act, 2018, IIMs were not classified as educational institutions.</li><li>However, GST exemption applied only to three specific programs under Sl. No. 67 of Notification No. 12/2017-Central Tax (Rate):<ol><li>Two-year full-time Post Graduate Programs in Management (PGDM) through CAT</li><li>Fellow Programme in Management</li><li>Five-Year Integrated Program in Management</li></ol></li><li>Any other program during this period was subject to GST.</li></ul><h4>4. Legal Position on Multiple GST Exemptions for IIMs</h4><ul><li>From January 31, 2018, to December 31, 2018, IIMs could claim either of two exemptions:<ul><li>Sl. No. 66 (Exemption for Educational Institutions)</li><li>Sl. No. 67 (Specific exemption for three IIM programs)</li></ul></li><li>The more beneficial exemption could be chosen, as ruled in multiple Supreme Court cases:<ul><li>H.C.L. Limited vs Collector of Customs (2001)</li><li>CCE vs Maruthi Foam (P) Ltd. (1996, affirmed in 2004)</li></ul></li></ul><h4>5. Removal of Redundant Exemption from January 1, 2019</h4><ul><li>Sl. No. 67 was deleted, since IIMs became fully exempt under Sl. No. 66.<a href="https://cms.plasament.com/storage/nisha/circular-cgst-82-new.pdf">circular-cgst-82-new</a>  </li></ul>