GST Classification and Place of Supply for Online Coaching Services
The Rajasthan Authority for Advance Ruling decided that online coaching with human interaction is a training service, not an automated digital service.
- Ruling
- RAJ/AAR/2025-26/23, dated 25.03.2026
- Dated
- 25 Mar 2026
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Online coaching with live teachers is classified under HSN 999293.
- It is not considered an OIDAR service due to significant human intervention.
- The place of supply is the provider's location, not the student's location.
- Transactions are treated as intra-state supplies, attracting CGST and SGST.
In short
The company asked if their online coaching, which includes live classes and doubt-clearing, should be taxed as an automated digital service or as standard coaching. The Authority for Advance Ruling (AAR) examined whether the service relies on human teachers or is mostly automated. They concluded that because teachers are actively involved, it is a training service rather than an automated digital product.
What has changed
How it worked before
Many businesses were uncertain whether online education platforms should be classified as OIDAR services, which often carry different tax implications regarding the student's location.
What has changed
The ruling confirms that coaching services with live human interaction are classified as Commercial Training and Coaching services. This means the place of supply is where the coaching provider is based, not where the student lives. Consequently, businesses must charge CGST and SGST instead of IGST for these services, even when students are in other states.
Who this affects
Coaching centers, ed-tech companies, and educational institutions providing live online classes.
An example
A coaching center in Delhi provides live online classes to students across India. They wonder if they should charge IGST because their students are outside Delhi. Based on this ruling, they would likely conclude that their service involves significant human intervention and should be treated as an intra-state supply, charging CGST and SGST instead.
What you should do
If you provide similar services, review your current tax classification. Remember that an Advance Ruling only binds the specific company that asked and its tax office; it is not a universal law for all businesses. Consult your tax advisor to see if your specific service model matches the criteria used in this ruling.
If you do nothing
If you incorrectly classify your services or apply the wrong tax, you risk a demand notice from tax authorities for unpaid taxes, interest, and potential penalties. A tax officer may disagree with your interpretation if your service model differs from the one in this ruling. Relying on a ruling that does not apply to your specific facts can lead to costly disputes during an audit.
The terms explained
- OIDAR
- Online Information and Database Access or Retrieval services are digital services provided over the internet with minimal human intervention, such as automated software or streaming content.
- Intra-state supply
- A transaction where the location of the supplier and the place of supply are in the same state, requiring the payment of both CGST and SGST.
- Place of supply
- The location where a service is deemed to be provided for tax purposes, which determines whether CGST/SGST or IGST applies.
The ruling in detail
Authority for Advance Ruling
M/s ALLEN CAREER INSTITUTE PRIVATE LIMITED
RAJ/AAR/2025-26/23, dated 25.03.2026 · Rajasthan
Questions before the authority
- Whether supply of online training services (delivered through live/recorded digital platforms) shall qualify as "online information or database access retrieval service" under HSN 998433 (i.e. On-line video content) or should be covered under HSN code 999293 (i.e. Commercial Training and Coaching Services)?
- Determination of the tax liability under the CGST and SGST Acts especially when the student is based in a state outside Rajasthan?
Facts
The applicant is an education institution providing coaching for competitive exams like IIT-JEE and NEET. They offer both offline classroom coaching and digital programs through an e-learning platform, which include live classes, pre-recorded content, and doubt-clearing sessions. The applicant sought a ruling on the classification of these online services and the applicable place of supply for students located outside Rajasthan.
Ruling
| Question | What the authority ruled |
|---|---|
| Classification of online training services | Classified as Commercial Training and Coaching services with SAC 999293 Does not qualify as OIDAR services |
| Tax liability for students outside Rajasthan | Liability is 9% CGST and 9% SGST Supply is treated as intra-state |
The Authority ruled that the applicant's online training services are classified as Commercial Training and Coaching services under HSN 999293, not as OIDAR services. Consequently, the place of supply is determined to be within the State of Rajasthan, making the transactions intra-state supplies regardless of the student's location.
Reasoning
The Authority reasoned that the services involve significant human intervention, such as live teaching, mentoring, and performance tracking, which contradicts the OIDAR requirement of being essentially automated with minimal human intervention. Relying on Section 12(5) of the IGST Act, the Authority determined that training services are specifically governed by the location where the services are actually performed. Since the applicant's operations, including content development and faculty instruction, are centralized in Rajasthan, the place of supply is Rajasthan. Therefore, the transaction is an **intra-state supply** under Section 8(2) of the IGST Act, attracting CGST and SGST.
Provisions relied on
- Section 97(2) of CGST/RGST Act, 2017
- Section 2(17) of IGST Act, 2017
- Section 8(2) of IGST Act, 2017
- Section 12(5) of IGST Act, 2017
For the practitioner
This ruling clarifies that **online coaching services** provided by institutions with significant human involvement do not qualify as OIDAR services. Practitioners should note that for such entities, the place of supply is the location of the service provider, resulting in **intra-state tax liability** even for students located in other states. It reinforces the importance of the 'impossibility test' and human intervention in distinguishing coaching from automated digital content services.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/order_allen_career_institute_pvt._ltd._compressed.pdf
Legibility of the scan, as read: high.
Prepared 12-10-2026.
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