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SGST Advance Ruling Authority

GST – Rajasthan AAR - Classification of online coaching services, Determination of place of supply - The online services include live online classes, pre-recorded courses, and a combination of both, delivered over the internet - Whether the online coaching services qualify as "online information or database access retrieval service (OIDAR)" under HSN 998433 or should be covered under HSN code 999293 for "Commercial Training and Coaching Services" – HELD - The statutory definition of OIDAR under Section 2(17) of the IGST Act requires two cumulative conditions, the service must be delivered over the internet or an electronic network, and the nature of the service must be such that its supply is impossible without information technology. While the applicant's services satisfy the first condition, they fail to meet the second condition - Coaching for competitive exams has traditionally been provided through physical classroom teaching, and the adoption of an online platform merely changes the mode of delivery, not the essential nature of the service. The "impossibility test" must be applied to the intrinsic character of the service, not the medium of its delivery - The applicant's services involve significant human intervention, including live interactive classes, doubt-clearing sessions, mentoring, and performance tracking, which are hallmarks of a coaching institution, not a passive content-retrieval mechanism. The applicant itself concedes that online coaching is merely a different medium for delivering the same service - The illustrative examples of OIDAR services under Section 2(17) are characteristically automated, faceless, and system-driven, unlike the applicant's services, which are heavily dependent on human involvement. The applicant has consistently reported its activities as "Commercial Training and Coaching Services" in its registration, invoices, and tax returns, which aligns with the Explanatory Notes to the Scheme of Classification of Services under GST – Accordingly, the applicant's online coaching services do not qualify as "online information or database access retrieval service" under HSN 998433, but are correctly classifiable under HSN 999293 for "Commercial Training and Coaching Services" – Ordered accordingly - Determination of place of supply and tax liability for online coaching services - The applicant provides online coaching services to students located across India, including within and outside the State of Rajasthan, where the applicant's headquarters, faculty, content development, and administrative operations are based – HELD - The applicant's contention that the services should be treated as OIDAR and, therefore, the place of supply should be determined under Section 12(2) of the IGST Act (recipient's location) is legally misplaced, as the services have been correctly classified as "Commercial Training and Coaching Services" under HSN 999293 - Section 12(5) of the IGST Act, which specifically governs the place of supply for training and performance appraisal services, is the applicable provision in the present case. Under Section 12(5)(b), for services provided to unregistered persons, the place of supply is the location where the services are "actually performed" - Based on the facts, the applicant's headquarters, faculty, content development, and administrative operations are all centralized and executed from Rajasthan. The physical dispatch of study materials also originates from Rajasthan. Therefore, the actual "performance" and provision of the coaching service occur strictly within the State of Rajasthan - Since both the location of the supplier (Rajasthan) and the place of supply (Rajasthan) are within the same State, the transaction constitutes an intra-state supply under Section 8(2) of the IGST Act, and the tax liability is CGST at 9% and SGST at 9%, irrespective of the location of the students.
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