Hostel Services Provided by Coaching Centres to Non-Residential Students Not Taxable

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has set aside a ₹1.22 crore service tax demand against Roy’s Institute of Competitive Examination Pvt Ltd (RICE), a Kolkata-based coaching centre. 

The Tribunal held that hostel fees collected from non-residential students were not taxable, as they are optional and not bundled with coaching services.

It also held that revenue-sharing payments from CMC Ltd. do not constitute a taxable service. 

Additionally, charges for admission forms, newspapers, magazines, were goods, not services, and optional library services were deemed non-taxable.

The Tribunal found no evidence of fraud or intent to evade tax, leading to the removal of all penalties.