TMI Blog2019 (3) TMI 1577X X X X Extracts X X X X X X X X Extracts X X X X ..... r of NSDC for the Financial Years 2014-15, 2015-16, 2016-17 201718. The appellant had not produced the certificate for the F.Y. 2018-19 and therefore it was held by the AAR that the statement made by the appellant that they continued to be a training partner of NSDC is not clear. However, at the appellate stage the appellant has produced the photocopies of certificates which shows that it is a training partner of NSDC for the F.Y. 2018-19 also. Therefore, the issue that the appellant is a training partner approved by NSDC is now clear. Secondly we have to examine whether the appellant provided services in relation to National Skill Development Program implemented by the NSDC. A reading of the relevant entry at Sr.No.69 of the Notification No.12 of 2017, shows that in order to claim exemption under it, the appellant has to provide any of the three conditions given at i), ii) and iii). The appellant has to prove that they provide services in relation to a) National Skill Development Program implemented by the NSDC or to Vocational Skill Development Course under the National Skill Certification and Monetary Reward Scheme. b) Any other scheme implemented by the NSDC. IMS Prosch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f other services relating to skill development provided by the appellant. The decision of AAR upheld. - MAH/AAAR/SS-RJ/19/2018-19 - - - Dated:- 4-2-2019 - SMT. SUNGITA SHARMA, AND SHRI RAJIV JALOTA, MEMBER PROCEEDINGS (under Section 101 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the MGST Act. The present appeal has been filed under Section 100 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by IMS PROSCHOOL PVT. LTD(herein after referred to as the Appellant ) against the Advance Ruling No. GST-ARA-37/2017-18/B-44 dtd.05.06.2018 = 2018 (10) TMI 681 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA . BRIEF FACTS OF THE CASE A. IMS Proschool Pvt Ltd. (herein after referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Government of India to fulfill the growing need of skilled manpower across sectors in India and narrow the existing gap between the demand and supply of skills. NSDC was set up by Ministry of Finance as Public Private Partnership (PPP) model. H. Appellant is an approved training partner of NSDC and till date, 12 educational courses offered by it have been approved by NSDC. Further, 2 educational courses for which Qualification Packs (herein referred to as QP )/ National Occupational Standards (herein referred to as NOS ) have not been defined by NSDC yet, have been conditionally approved by NSDC. All such courses offered by the Appellant are directed towards skill development and to help increase skilled employment in India. I. The technical and vocational educational courses offered by the Appellant are either funded by NSDC/ Central Government/ State Government or are paid up courses which are enrolled by individuals, corporate. J. With advent of GST, there are various services which are exempt under the new indirect tax regime vide Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Relevant to current context, Appellant would like to reproduce En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t QP/ NOS would be defined by NSDC. In the interim period, NSDC has given exceptional approval on such courses. Till the time QP/ NOS are defined for such educational courses and are eventually approved by NSDC, whether such courses will be treated as in relation to National Skill Development Programme implemented by NSDC? Q.3. In certain situations, NSDC approved educational courses are subsequently upgraded by the Applicant within pre-defined QP/ NOS framework, by way of adding more topics/ contents /modules. However, such modified version of NSDC approved educational courses have not been approved by NSDC yet. Whether such modified version will be treated as in relation to National Skill Development Programme implemented by NSDC? Q.4. If the answer to Q.1, Q. 2 and Q.3 is Yes, then whether the benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? Q.5. If answer to Q.4 is yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be still available if such educational courses are offered to corporate and bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If the answer to Q. 1, Q.2 and Q.3 are Yes, then whether the benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? If all the norms of NSDC fulfills, then yes. 5. If answer to Q.4 is Yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be still available if such educational courses are offered to corporates and business institutions? No. 6. Whether the NSDC approved educational courses which are actually imparted by the business partners of the Applicant, on behalf of the Applicant as sub-contractor of Applicant, at various centres located across the country, will be considered as offered by the Applicant? Should be approved by the NSDC, not for sub-contractor of the applicant. 7. If answer to Q.6 is Yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en none of parties would approach a judicial forum for resolution of the conflict/ dispute. Under Section 105 of Central Goods and Services Tax Act, 2017, ARA is considered as a Court . Hence, an applicant approaches ARA for obtaining decision for a dispute which may arise in future. Therefore, in case there is no dispute, then decision of ARA is not required. 1.4. Under tax laws, the tax payer and the jurisdictional tax officer are parties between whom a dispute or difference of opinion may arise. ARA is intended to resolve possible conflicts between the tax payer and the jurisdictional tax officer. In this case, Appellant had posed certain questions before ARA with respect to entitlement of exemption. However, if the jurisdictional tax officer is of the view that Appellant is eligible for exemption then there is no possibility of a dispute and the decision of ARA is not required. 1.5. On page 10 of the Order, the ARA has taken, on record, submissions from the jurisdictional tax officer. In the submissions while answering Question No.1, the jurisdictional tax officer has categorically mentioned that exemption is available, which can be seen from the table, which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional Skill Certification and Monetary Reward Scheme; or (iii) any other Scheme implemented by the National Skill Development Corporation. 2.3. Appellant state that there is no dispute that IMS Proschool Pvt. Ltd. is a training partner approved by NSDC as mentioned in clause (H) above. This has been acknowledged on page 14 of the impugned Order. However, the ARA had observed that the copy of certificate for training partner of NSDC was not produced for FY 2018-19. Appellant state that they are training partners for NSDC for FY 2018-19 and the certificate has been attached to support this claim as being the training partner in the F.Y. 2018-19. Hence, the first pre-requisite for exemption is achieved. 2.4. To be eligible for exemption, the services provided by Appellant has to be in relation to either of the items listed under clause (i) to (iii) above. The scope of the phrase in relation to has been explained, in detail, in subsequent grounds of Appeal. Appellant state that sub-clause (i) and sub-clause (iii) give exemption to activities which are implemented by NSDC. Following diagram explains the scope of these sub-clauses: 2.5. Images 2.6. Hence, the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntivizing: In the near term, this is a key role. This involves providing financing either as loans or equity, providing grants and supporting financial incentives to select private sector initiatives to improve financial viability through tax breaks, etc. The exact nature of funding (equity, loan and grant) will depend on the viability or attractiveness of the segment and, to some extent, the type of player (for-profit private, non-profit industry association or non-profit NGO). Over time, the NSDC aspires to create strong viable business models and reduce its grant-making role. Enabling support services : A skills development institute requires a number of inputs or support services such as curriculum, faculty training standards, quality assurance, technology platforms, student placement mechanisms and so on. NSDC plays a significant enabling role in these support services, most importantly in setting up standards and accreditation systems in partnership with industry associations. Shaping/creating : In the near-term, the NSDC will proactively seed and provide momentum for large-scale participation by private players in skill development. NSDC will identify cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l proposals with the supporting annexure and share it with the Project Development team of NSDC; e. The PD team analyses the proposals and gives necessary feedback for improvement of the proposal f. After complete hand-holding in the drafting process, refined proposals are finally submitted with supporting documents to NSDC for further due diligence g. After evaluation the proposals are approved 3.5. In the instant case, all the necessary steps as enumerated above are followed for Appellant as well. The relevant extract of cover page of the proposal invitation by NSDC is reproduced as under: The National Skill Development Corporation ( NSDC ) has been set up under the PM s National Council on Skill Development with the primary mandate of enhancing, supporting and coordinating private sector initiatives for skill development. To fulfill its objectives, NSDC is looking for proposals to create training institutes that are innovative in operating mode/ and can have a multiplier effect for skill development ( Proposal(s) ). They have referred to the Proposal template(enclosed) to understand NSDC s evaluating guidelines................., 3.6. It is im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1983 (13) E.L.T. 1534 (S.C.)] = 1969 (9) TMI 41 - SUPREME COURT OF INDIA , the Apex Court also observed that the administrative authorities should, instead of relying on technicalities, act in a manner consistent with the broader concept of justice. 4.4. Appellant would like to refer to the provisions applicable under the erstwhile Finance Act, 1994 as under: Provision Extract of provision From 01.07.2012 upto 10.05.2013 Section 66D-clause (l) (negative list) Services by way of- (i) (ii) (iii) education as a part of an approved vocational educational course Section 65B(11) approved vocational educational courses means- (iii) a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India. w.e.f. 10.09.2013 Notification No. 25/2012-ST dated 20.06.2012 Entry 9A Any services provided by,- (i) the National Skill Development Corporation set up by the Government of India; (ii) a Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wide and increases the scope of exemption 5.1. For Q2, Q3, Q5 and Q6 as mentioned in facts supra, the ARA has denied exemption for certain activities which are in relation to the training for skill development. Appellant state that entry 69 of Notification No. 12/2017-Central Tax (Rate), is wider than interpreted by ARA and the exemption has been erroneously denied. At the risk of repetition, the relevant extract is reproduced as under: (d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to.... 5.2. Once it is established based on the preceding grounds of appeal, that Appellant is entitled for exemption under sub-clause (i) of the said notification, it is imperative to establish the scope of the said exemption. Appellant state that the phrase in relation to expands the scope of the exemption and in fact it exempts any activity which is associated with or helps in achieving the objectives of National Skill Development Programme . The Hon ble Apex Court in the case of Doypack Systems (Pvt) Ltd. vs. Union of India [1988 (36) E.L.T. 201 (S.C.)] = 1988 (2) TMI 61 - SUPREME COURT OF INDIA has obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity of manufacture of the final product. Therefore, the words in relation to the manufacture have been used to widen and expand the scope, meaning and content of the expression inputs so as to attract goods which do not enter into finished goods......... ... 5.4. Similar observations are made in various judicial pronouncements: a. National Co-operative Sugar Mills Ltd. vs. CCE, Madurai [2016 (344) E.L.T. 832 (Mad.)] = 2016 (7) TMI 1073 - MADRAS HIGH COURT b. CCE, Chandigarh vs. Oswal Agro Mills Ltd. [2000 (118) E.L.T. 166 (Tribunal)] = 1996 (10) TMI 336 - CEGAT, NEW DELHI c. Sipta Coated Steel Ltd. vs. CCE, Aurangabad [1998 (99) E.L.T. 553 (Tribunal)] = 1997 (12) TMI 252 - CEGAT, MUMBAI d. Northern Coalfields Ltd. vs. CCE, Bhopal [2017 (5) G.S.T.L. 217 (Tri. - Del.)] = 2017 (6) TMI 324 - CESTAT NEW DELHI e. Indian Iron Steel Co. Ltd. vs. CCE, Bolpur [2002 (141) E.L.T. 695 (Tri. - Kolkata)] = 2002 (1) TMI 136 - CEGAT, KOLKATA f. CCE, Patna vs. Hari Nagar sugar Mills Ltd. [2001 (136) E.L.T. 255 (Tri. - Kolkata)] = 2000 (1) TMI 614 - CEGAT, KOLKATA g. CCE, Allahabad vs. Hindalco Industries Ltd. [1997 (96) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to develop the skills of the candidate and help them find a job or better job role. 3 In certain situations, NSDC approved educational courses are subsequently, upgraded by the Applicant within pre-defined QP/ NOS framework, by way of adding more topics/ content /modules. However, such modified version of NSDC approved educational courses have not been approved by NSDC yet. Whether such modified version will be treated as in relation to National Skill Development Programme implemented by NSDC? These modifications do not change the primary structure of already approved courses. The existing modules are not deleted from it, only, supplementary modules/ programs are added to it. Such modified courses are aligned to QP/NOS and are more beneficial for students, to enhance their skill. 5 If answer to Q.4 is Yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be still available if such educational courses are offered to corporates and business institutions? The exemption notification does not require that the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scope of exemption. Appellant state that the Ld. ARA has erred in narrowing the scope of exemption and denying the exemption for the aforementioned situations. 6. The ARA has passed the Order based on presumptions and assumptions 6.1. Appellant state that the ARA has passed the Order on preposterous presumptions and assumptions without considering the facts on hand. The following points summarize the assumptions made in the Order: a. In the application itself, Appellant are claiming and stating clearly that the services being provided are not in relation to and not covered under clause (ii) and (iii) of the exemption notification. b. Services being in the nature of approval and certification of course are provided by NSDC to the Appellant and not by Appellant to NSDC and thus there is no question of the applicant being eligible for any exemption in this respect as they are service recipient and not service provider in relation to NSDC c. National Skill Development Programme consists of the schemes, actions and deeds that are actually done or are mandated to be done by various ministries, Government departments or their attached offices. d. It can be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus if the quasi judicial authority has to grant the personal hearing on the date and time decided by him while deciding the case, then that authority alone can grant the said personal hearing on that date and time. The record of such hearing should be essential part of the record of the case under the signature of the said authority in person. d. The quasi-judicial orders subject to judicial review have to be necessarily speaking orders recording every fact and reason leading to the final decision in the matter. Nonspeaking orders or the orders passed without recording the submissions and reasons for passing the final order is nonest in law. 6.4. Applying the legal maxim Lex plus laudatur quando ratione probatur; meaning that the law is the more praised when it is supported by reason, Appellant state that the ARA has passed the Order without giving appropriate reasons for making such assumptions. Personal Hearing 7. A personal Hearing in the matter was conducted on 13.12.2018, wherein Shri Sunil Gabhawalla, C.A., representative of the Appellant, reiterated their written submissions. Shri B. Y. Netke, Asstt. Commissioner of State Tax, appearing as jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment Corporation; (h) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to (iv) the National Skill Development Programme implemented by the National Skill Development Corporation; or (v) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (vi) any other Scheme implemented by the National Skill Development Corporation. ** 12. With respect to the first requirement the service provider has to be a training partner approved by NSDC or the sector Skill Council and at the time of Advance Ruling the appellant had submitted photocopies of certificates which shows that the appellant is a training partner of NSDC for the Financial Years 2014-15, 2015-16, 2016-17 201718. The appellant had not produced the certificate for the F.Y. 2018-19 and therefore it was held by the AAR that the statement made by the appellant that they continued to be a training partner of NSDC is not clear. However, at the appellate stage the appellant has produced the photocopies of certificates which shows that it is a training partner of NSDC for the F.Y. 2018- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echanical Assembly, Electrician Courses, Sales Courses etc. They also prepare programs which includes preparing crews and working professionals to appear for various national and international certification including Financial Modelling, Financial Analysis, Management Account, Business Analysis etc. The appellant has claimed that they have tie up with various Government Organizations including NSDC. 17. NSDC is a Public Limited Company and was set up as a Public Private partnership model to fulfill the growing needs of skilled manpower in India and narrow the gap between demand and supply of skill. 18. It is seen that neither in the grounds of appeal nor in the hearing the appellant has given any conclusive evidence that the training programmes offered by them are covered under (i) or (iii) of the Notification entry no 69. The appellant has not made any claim in their submission that their training programs or educational courses are implemented under PMKK PMKVY or UDAN, and therefore the AAR was right in coming to the conclusion that the services offered by the applicant are not covered by Sr. No. ii iii. 19. It is seen from the AAR that they have decided the questions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, directorate and cannot be construed to include each and every activity under the sun. 20. We agree with the order of the AAR. It is true that the appellant is a training partner approved by the NSDC. It is also true that NSDC has a mandate to promote skill development by catalysing the creation of large quality private vocational institutions and also to create a network of strong institutions which would provide useful and quality training to the youth to make them employable. One of the major ways by which it achieves the above is through funding to select private training initiatives and the funding provide by it is in the form of loans, equity and grant. However, there are also certain schemes which are implemented by the Ministry of Skill Development and Entrepreneurship and NSDC is the nodal employment agency for such scheme. The website of the NSDC www.nsdcindia.org specifically mentions various schemes and initiative conducted by it. Under the various schemes and initiatives, the schemes which have been mentioned are PMKVY, Sankalp, Udaan, International Skill Training under which International Skill Centres were set up. PMKVY is an ambitious program intending to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing grants and financial incentives to select private sector initiatives. The exact nature of funding i.e. equity loan and grant will depend on the viability and attractiveness of the scheme. 2) Enabling Support Services: A Skill Development Institute requires the number of inputs or support services such as Curriculum Facility, Training Standards, Quality Assurance, Technology Platform, Student Placement Mechanism and so on. NSDC plays a role in this support services in setting up standard and accreditation systems in partnership with industrial associations. 3) Shaping/Creating: In the near term, NSDC proposes to provide momentum for large scale participation by private players in skill development 22. In short NSDC has twin mandates- one of that is to implement the specific scheme of the government like PMKVY, SANKALP, UDAAN etc. and the other mandate is a general mandate which is to encourage and support private sector and skill development. As mentioned earlier, the general mandate of skill development is fulfilled through funding and also funding is given to private sector initiatives by giving loans at a concessional rate and certain tax breaks are given. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant falls under the general mandate of NSDC of skill development and has nothing to do with any programme implemented of NSDC. 24. The annual report of NSDC for the year 2017-18 says the following :- .. The Company is the implementation agency for key skill development schemes like Pradhan Mantri Kaushal Vikas Yojna (PMKVY), Pradhan Mantri Kaushal Kendra (PMKK), Pravasi Kaushal Vikas Yojana (PKVY), UDAAN, Capacity Building Technical Assistance Scheme (North East Project). The Company in collaboration with Ministry of Housing and Urban Poverty Alleviation, GOI is implementing National Urban Livelihood Mission (NULM). The Company, in partnership with Industry is carrying out skill development activities under Corporate Social Responsibility (CSR). 25. What is clear from the above is that the NSDC is implementing certain programmes which are specific and identified. The appellant has stated that the NSDC has not announced specifically any course/programme which would be considered as a part of the National Skill Development programme implemented by NSDC. But the Annual Report is very clear. The NSDC does implement programmes independently which is very clear fr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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