Coursera Licence Supply To OSDA By Sub-Contractor Not Education Service, Liable To 18% GST: Odisha AAR

The Odisha Authority for Advance Ruling has recently ruled that a sub-contractor supplying Coursera user licences to the Odisha Skill Development Authority cannot claim GST exemption as an education service, ruling that its role was limited to enabling access to third-party digital content rather than imparting education.

“The applicant does not conduct training and no faculty, curriculum control, or instructional responsibility lies with the applicant. The role of the applicant is limited to facilitating access to third-party educational content. Further, under the MOU dated 24.12.2023, Coursera provides rights to OSDA to access its platform and the platform hosts courses and specializations from world class universities and instructors. However, neither the Applicant nor Coursera is obligated under the MOU to deliver any Education and Training to the technical students. The courses are made available; the act of teaching is performed by thirdparty universities and instructors on Coursera's platform, not by the Applicant. Therefore, the supply cannot be classified as education service.”, it ruled.

A coram of CGST Member Harsh Vardhan and SGST Member Pratima Mohanty held that the supply was correctly classifiable under Heading 9973, specifically SAC 997331, covering licensing services for the right to use computer software and databases, and not under Heading 9992 relating to education services.

The applicant, Unitech Engineers, a proprietorship firm based in Rourkela, had been appointed as a sub-contractor by Coursera Inc., USA, under a separate agreement dated December 26, 2023, to supply user licences to the Odisha Skill Development Authority pursuant to a December 24, 2023 memorandum between Coursera and OSDA.

The licences were meant to allow technical students in colleges and universities across Odisha to access online skill development courses in Artificial Intelligence, Machine Learning, Data Analytics, Cyber Security, Cloud Development and other emerging fields under the Nutana Unnata Abhilasha (NUA) Odisha scheme.

Unitech had raised invoices on OSDA charging 18% GST, which OSDA initially reimbursed for three invoices. It later stopped reimbursement, contending that the supply was exempt from GST as an education service, prompting the advance ruling application.

Rejecting the classification under education services, the Authority found that neither Unitech nor Coursera was contractually obliged to impart education or training to students, and that the teaching was actually delivered by third-party universities and instructors through Coursera's platform.

The Authority also rejected OSDA's claim for GST exemption under Serial No. 72 of Notification No. 12/2017-Central Tax (Rate), holding that the exemption conditions were not met.

“OSDA is not the 'State Government: The exemption under S1. No. 72 applies to services provided directly to the Central Government, State Government, or Union Territory Administration. OSDA is an autonomous body registered under the Societies Registration Act, 1860. It is not the State Government of Odisha. It cannot be equated with the State Government for the purpose of an exemption notification, which must be construed strictly..”

The Authority further held that the supply was of a user licence granting access rights, not the conduct of a training programme.

On classification, the bench held that the transaction involved the grant of a nonexclusive right to access Coursera's proprietary digital platform, making "licensing services" the more specific classification.

The Authority noted that even if the supply were classified under a different GST category covering online content services, the applicable tax rate would still remain 18%. However, it held that the more appropriate classification was as a licensing service for access to software and digital platforms.

Accordingly, the exemption claimed by OSDA was held to be unavailable.