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2022 (6) TMI 1285 - AAR - GSTLevy of GST - valuation - reimbursed amount of Stipend received from Industry Partner to be distributed to the trainees at actuals - pure agent service - HELD THAT:- Section 2 (5) of the CGST Act, 2017, defines the term “Agent” as “a person including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another” - It is found that the Applicant is registered as a facilitator under the National Employability Enhancement Mission (‘NEEM Scheme’). The details of the NEEM Scheme are mentioned in the subject application and are therefore not reproduced again. The Applicant has submitted that, as a NEEM Facilitator, they are responsible to enroll NEEM trainees (`trainees’) and provide them with on job practical training through various Institutes, Factories, etc. (‘Industry Partners’) to enhance the prospects of their employability. The applicant would enter into Agreements to enroll NEEM trainees (‘trainees’) and provide them with on job practical training through the said Industry Partners. Applicant selects trainees for imparting practical training to them & to coordinate between the trainees and the said Industry Partners for the proper implementation of scheme of training envisaged under the Apprentice Act 1961 and for such purpose, enters into a written agreement with the Industry Partners, for identifying and providing relevant eligible trainees to the Industry Partners, for which a fixed administrative fee per trainee per month will be charged from such Industry Partners and on which the applicant accepts that GST is payable. Regarding the issue in respect of stipend paid to the trainees by the applicant, it has been submitted by the applicant that the concerned Industry Partners will provide training to the trainees and are required to pay stipend to the trainees as per the NEEM Regulations. Even though, it is seen that the services will be provided by the trainees to the Industry Partners, for which stipend is mandated to be paid to the trainees by the Industry Partners, this stipend is not directly paid to the trainees by the said Industry Partners but will be routed through the applicant as per the NEEM Regulations. The entire amounts received as stipend from the Industry Partners will be paid to the trainees without any amount being retained. Thus, the applicant is only acting as an intermediary in collecting the stipend from the Industry Partners and then disbursing the same to the trainees in full without making any deductions from the stipend before disbursement to the trainees. The amount of stipend received by the applicant from the Industry Partners and paid in full to the trainees is not taxable at the hands of the applicant. Hence, in view of the submissions made by the applicant and also in agreement with the observations made by the jurisdictional officer, it is held that the stipend paid by the Industry Partners to the applicant to be further paid to the trainees in full does not attract GST and is not required to be added to the taxable value. In a similar case of IN RE: M/S. YASHASWI ACADEMY FOR SKILLS [2021 (8) TMI 1018 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA] this Authority has held that the reimbursement by Industry Partner to the applicant, of the stipend paid to the trainees, does not attract tax under the GST Act - In the case of Yashaswi Academy for Skills, the Applicant Companies were registered as agents under National Employability Enhancement Mission (NEEM) of the Government of India and acted as a facilitator for extending support for mobilizing the trainees under NEEM Scheme of Government of India as per regulations, under notification issued by All India Council for Technical Education (AICTE), for providing on-the-job practical training in industries to trainees to enhance their future employability, and for which they entered into agreements with various companies/ organizations (called as industry partners) to impart actual practical training to the students. In the said case also, the applicants, in addition to taxable amounts received from its Industry Partners for services rendered, also received Stipends amounts (payable by the Industry Partners to the Trainees) which was paid in full to the trainees. Since the matters in the Yashaswi Academy case as case decided by this authority is very similar to the facts of the subject case, there are no reason to deviate from our ruling given in the said case, which are also applicable in the subject case. GST is not leviable in the instant case.
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