SERVICE TAX EXEMPTION TO SKILL DEVELOPMENT PROGRAMMES

[Dr. Sanjiv Agarwal]

Services provided in relation to skill development programmes shall be exempt from service tax w.e.f. 10.09.2013 under Entry No. 9A of Exemption Notification No. 25/2012-ST dated 20.06.2012.

Under this entry, following services shall be exempt from levy of Service Tax:

Any services provided by _           

(i)      the National Skill Development Corporation (NSDC) set up by the Government of India;

(ii)     a Sector Skill Council approved by the National Skill Development Corporation;

(iii)    an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;

(iv)    a training partner approved by the National Skill Development Corporation or the Sector Skill Council

in relation to (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c)  any other Scheme implemented by the National Skill Development Corporation

This exemption in relation to various eligible skill development programmes shall be available w.e.f. 10 September, 2013 and has been inserted in Notification No. 25/2012-ST vide Notification No. 13/2013-ST dated 10.09.2013.

The exemption is available subject to the following two conditions –

1. Services should be provided by specified or approved corporation, agency, partner or council; and
2. Such services should be only in relation to specified programmes or courses.

Accordingly, following specified service providers shall be eligible for exemption:

1. National Skill Development Corporation (NSDC) set up by Government of India (i.e. Central Government)
2. Sector Skill Council (SSC) approved by NSDC.
3. Assessment Agency (AA) approved by NSDC or SSC
4. Training Partner (TP) approved by NSDC or SSC

 

Services provided by any other service provider or agency shall not be eligible for this exemption.

NSDC is a first-of-its-kind Public Private Partnership (PPP) in India set up to facilitate the development and upgrading of the skills of the growing Indian workforce through skill training programs. A large part of the organisation’s efforts are directed at the private sector and towards developing the skills in the unorganised sector in India. NSDC supports skill development efforts, especially in the unorganised sector in India by funding skill training and development programmes. It also engages in advocacy and training programmes, in-depth research to discover skill gaps in the Indian workforce, and developing accreditation norms.

The eligible service providers i.e., NSDC or SSC or AA or TP shall provide services in relation to the following only so as to claim exemption from Service Tax –

1. National Skill Development programme implemented by NSDC, or
2. Vocational Skill Development Course under National Skill Certification and Monetary Reward Scheme, or
3. Any other scheme implemented by the NSDC.

Thus, programme or course should be implemented by NSDC. It could be national skill development programme or any other programme. What is important is that it should be implemented by NSDC. Besides, any vocational skill development course is also exempt provided it is under National Skill Certification and Monetary Reward Scheme. This scheme was launched in August, 2013 to train youth who would be trained, required to appear for national skill test before getting a certificate and reward of Rs. 10,000. the scheme provides monetary awards for skill certification to boost employability and productivity . The scheme in funded by Government of India and implemented by NSDC.