AAR Ruling: GST on Guest Lectures

February 17, 2022

The Authority for Advance Ruling (AAR) of the Karnataka bench has ruled that 18 percent GST will be levied on the income that is earned from providing guest lectures.

Overview:

  • The petitioner contacted the AAR to obtain clarification as to whether income earned from guest lectures will attract any form of taxation.
  • In passing the ruling, AAR stated that the service in question falls into the other professional, business, and technical service categories, not the exempted service category. Therefore, 18% GST will be charged for the services mentioned by the applicant.
  • This ruling of the AAR means that service professionals with income of over Rs 20,00,000 will have to pay the Goods and Services Tax of 18% on the revenue earned from guest lectures.

About Authority for Advance Ruling

  • AAR is a separate quasi-judicial court that makes preliminary judgments in India on the applicable taxes.
  • It was initially launched for foreign investment, but later it was made applicable for both non-residents and residents so that they can request advance ruling if the tax impact is significant.
  • This applies to both direct as well as indirect taxes. The Central Board of Direct Taxes publishes a circular for advance rulings on direct taxes.
  • The general purpose of establishing such an institution is to issue certainty about the tax obligations associated with the activities proposed by the applicant as well as attract foreign direct investment and reduce litigation and be transparent on the rulings.

Members of AAR

AAR comprises one member from CGST and one member from SGST who are appointed by the State and Central governments.

AAR Rulings

The original outlook was that the tax administration as well as the taxpayer couldn’t appeal against the AAR rulings. But, currently, either party can appeal against the rulings made by the AAR before the Supreme Court or the High Court. The Supreme Court has decided that an appeal against the AAR decision must first be filed with the High Court.

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