TMI Blog2021 (8) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... ements with various companies/ organizations (called as industry partner) who impart actual practical training to the students. The stipend is not directly paid to the trainees by the companies, rather the same are routed through the applicant. The applicant has submitted that the entire amounts received as stipend from the companies are paid to the trainees without any amount being retained. Thus, it is seen that the applicant is only acting as an intermediary in collecting the stipend from the companies and then disbursing the same to the trainees in full since the applicant is not allowed to make any deductions from the stipend before disbursing the same to the trainees - The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the trainer Companies (industry partners) against which stipend is payable. Hence the amount of stipend received by the applicant from the industry partners and paid in full to the traniees, is not taxable at the hands of the applicant. The reimbursement by Industry Partner to the applicant(YAS), of the stipend paid to the trainees, does not attract tax under the GST Acts. - GST-ARA-84/2019-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, the trainees are paid monthly stipend. The trainees are not treated as employees of the company. 2.4 Role of the applicant i.e. YAS: a) Preparation of monthly attendance record of the trainees and getting it certified from the Company. b) Processing Stipend of the trainees. c) Payment of stipend to the trainees in their individual bank accounts. d) Providing uniform and safety shoes (as per requirement of industry partner) to the trainees e) Take Insurance policies towards Employee Compensation and Personal Accident Policy for trainees Consideration or monetary aspect and invoicing: 2.5 For carrying out these functions, YAS gets fixed administrative fees per candidate from the Industry partner. YAS issues invoices specifying separately the administrative charges and amount for reimbursements of Actual expenses incurred on behalf of Industry partner towards: 1. Stipend paid to the trainees 2. Actual CGST of uniform and safety shoes provided by YAS to the trainees 3. Actual CGST of Insurance Premium towards Employee Compensation and Personal Accident Policy. 2.6 Minimum stipend payable by industry to trainee is fixed by the Governmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to procure such goods or services in addition to the amount received for supply he provides on his own account. 2.10 Trainee students are paid remuneration in the form of stipend for their work as trainees. Thus, industry is recipient of supply of services by trainees. Payment of stipend by YAS is an expenditure on behalf of industry Partner and hence qualify as pure agent. YAS does not procure goods and services for its own interest. Shoes, uniform are as per requirement of Industry Partner and insurance premium is not for use of YAS but for the benefit of trainee students. YAS gets reimbursement of actual amount incurred for procurement of goods and/or services on behalf of principal (industry Partner). YAS gets separate charges for providing the services of selecting trainees, preparing stipend statement and disbursing stipend, taking out insurance policies, procuring uniform and safety shoes. 2.11 As per clause 3 of the sample agreement referred above Industry Partner i.e. Future Retail Ltd. Is responsible to reimburse actual CGST of Uniform, safety shoes and CGST of Insurance premium. As per clause 4 YAS is responsible to collect stipend from Future Retail and pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parting actual training to the trainees. The agreements are in conformity with the scheme and regulation of National employment enhancement mission. The agreements are required to be in conformity with the scheme and regulation under NEEM notification. Therefore, in sum and substance all agreements are identical. 2.17 The applicant has attached one agreement with Future Retail Limited as specimen. In the said agreement the applicant as agent/facilitator under NEEM scheme entered into agreement with Future Retail Limited called as industry partner. In the agreement the role and responsibilities of industry partner are stipulated in clause no. 3 which is on page no. 9. Sr. No. 6 10 of point no.3 are about stipend payment to trainees. 2.18 Copy of invoice raised by Applicant on Industry partner for reimbursement of stipend is on page no.14 and stipend paid to students is on page no.15 16. From its perusal it is crystal clear that the applicant has paid stipend equal to the amount receivable as reimbursement from industry partner as stipend. 2.19 Role and responsibilities of Neem Agent (applicant herein) are stipulated in clause No.4 which is on page no.9 and 10. Duties in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipient of supply and fulfils all the conditions required as per Rule 33 of the CGST Act, 2017. In view of the above facts, following observations have been chalked out. 1. Whether the reimbursement by Industry Partner to M/s Yashaswi Academy for Skills of the stipend paid to students attracts GST? Ans : The Company (industry partner) which is providing on the job training to the trainees is required to pay the stipend to the trainees and the applicant M/s Yashaswi Academy for Skills is only acting as an intermediary in collecting the same from the trainer companies to the students. The service is provided by the trainers to the trainess as the trainer is liable to make payment of the consideration. This consideration is paid through the applicant and the applicant is not allowed to make any deductions in that amount. Hence, the applicant is only a conduit for the payment and the actual service is by the trainers to the trainees. Therefore, the reimbursement by the industry partner to the applicant of the stipend paid to students is not taxable in the hands of the applicant. 2. Whether the reimbursement by Industry Partner to M/s Yashaswi Academy for Skills of the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.07.2021 and have further confirmed the same vide their correspondence dated 28.07.2021. Hence our discussions will only be in respect of Question No. 1 namely; Whether the reimbursement by Industry Partner to the applicant, of the stipend paid to students attracts GST . 5.3 We find that, the Applicant is registered as an Agent under National Employability Enhancement Mission (herein after referred to as NEEM') for facilitating and extending support for mobilizing trainees under NEEM Scheme of Government of India as per regulations under notification issued by All India Council for Technical Education (AICTE), for providing trainees on-the-job practical training in industries to enhance their future employability. For that purpose, as a NEEM agent, the noticee enters into agreements with various companies/ organizations (called as industry partner) who impart actual practical training to the students. During the duration of the training, the trainees are paid monthly stipend. 5.4 The Applicant has submitted that, as per rules of NEEM scheme Applicant chooses suitable industry partner (having infrastructure facilities) for actual job training to selected trainee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partner to the applicant of the stipend paid to students is not taxable in the hands of the applicant. 5.9 The response of the jurisdictional officer to Question Nos. 2 and 3 are not being considered since both the questions are withdrawn by the applicant vide their submissions dated 27/28.07.2021. 5.10 We find that, the applicant, is registered as Agent under National Employability Enhancement Mission ( NEEM') for facilitating and extending support for mobilizing trainees under NEEM Scheme of Government of India as per regulations under notification issued by All India Council for Technical Education (AICTE), for providing trainees on-the-job practical training in industries to enhance their future employability, For that purpose, for which they enter into agreements with various companies/ organizations (called as industry partner) who impart actual practical training to the students. The applicant, in lieu of agreements with the industry partners, is engaged in preparing monthly attendance record of the trainees, getting it certified from the Company ; processing stipends of the trainees ; making payment of stipend to the trainees ; providing uniform and safety shoes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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