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TMI Blog2023 (6) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... s would be covered under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 and Si. No. 66 (a) of the Notification No. A.NI-2-843/X1-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017, and thereby, exempted from levy of Central Goods and Service Tax & Uttar Pradesh Goods and Service Tax." 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. The applicant has submitted that- 3.1 Applicant is a group company of Inter Globe Enterprises Private Limited ("hereinafter referred to as Inter Globe"), which is engaged in the business of facilitating the training of commercial pilots on the Aircraft Simulators installed at its training facilities. Such training is provided in accordance with the training curriculum approved by the Directorate General of Civil Aviation (hereinafter referred to as "DGCA") for obtaining the extension of aircraft type ratings (hereinafter referred to as "ATRs") on their existing licenses. 3.2 Under Section 5(2)(g) and (o)1 of the Aircraft Act, 1934 (hereinafter refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e DGCA for an endorsement in respect of their license. 3.9 For making an application for the extension of ATR, the following documents need to be submitted by the applicant: a. Duly certified logbook of the applicant. b. Duly certified training progress statement. c. Duly certified ATR skill test report. d. Duly certified Form CA-39, for the preceding six months and for the preceding 12 months, each. 3.10 Thus, the training provided for the extension of ATR can be undertaken only at training organisations approved by the DGCA, and the documents referred to above have to be issued by such an organisation and the pilots holding the Commercial Pilot License (CPL(A)) have to mandatorily undergo the ATR training for the specific type of aircraft(s) that they will be flying with any commercial airlines, i.e. the pilots cannot fly for any commercial airlines unless they hold the ATR for particular aircrafts that such airlines fly in the ordinary course of business. 3.11 In order to standardize and streamline the process, Civil Aviation Requirement (hereinafter referred to as 'CAR') has been issued under the provisions of Rule 29 C and Rule 133A of the Aircraft Rules, 1937 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12/2017') and Sl. No. 66 (a) of the Notification No. A.NI.-2-843/XI-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017 (hereinafter referred to as 'Notification dated 30.6.2017'), and thereby, exempted from levy of Central Goods and Service Tax & Uttar Pradesh Goods and Service Tax (hereinafter collectively referred to as 'GST'). APPLICABLE PROVISIONS OF THE CGST ACT Levy of GST 4.2 Section 9(1) of the CGST Act is the charging section levying Central Goods and Service tax (for short 'Central tax' or 'CGST') on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under Section 15 of the CGST Act. 4.3 The term 'supply' has been given meaning under Section 7 of the CGST Act to include - a. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. b. import of services for a consideration whether or not in the course or furtherance of business. c. the activities specified in Schedule I, made or agreed to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stitution to its students, faculty and staff Nil Nil "2. Definitions. - For the purposes of this notification, unless the context otherwise requires, - .... (y) "educational institution" means an institution providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;" 4.10 The corresponding exemption notification under UPGST is Notification dated 30.6.2017. The relevant entry of the Notification dated 30.6.2017 and the Explanation in that regard have been extracted below: 66 Heading 9992 or Heading 9963 Services provided - (a) by an educational institution to its students, faculty and staff .... Nil Nil "2. Definitions. - For the purposes of this notification, unless the context otherwise requires, - (y) "educational institution" means an institution providing services by way of - (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulty and staff is exempt under Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, Sl. No. 66. 4.17 The Applicant, in the present case, submits that the Applicant qualifies as an educational institution who is supplying services to its trainees (students), and therefore, the supplies made by it would be covered under Sl. No. 66 (a) of Notification No. 12/2017. 4.18 It is submitted that educational institutions have been defined under clause (y) to Notification No. 12/2017 to mean institutions providing services by way of: a. pre-school education and education up to higher secondary school or equivalent; b. education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; and c. education as a part of an approved vocational education course. 4.19 From amongst the three categories of educational institutions considered for exemption under the Notification No. 12/2017, the one providing education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force is relevant in the present case. 4.20 Thus, to qualify as an educational institution following conditions needs to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of degrees, diplomas, etc., but the possession of skills, accomplishments, etc. which have been acquired through training or academic education, and which confer upon a person the ability to undertake a particular profession or pursuit. 4.28 It is submitted that, in the present case, the qualification being referred to is the completion of the training programme provided by the Applicant, where the competency required for applying for an ATR extension in the pilot's license in terms of Schedule II to the Aircraft Rules is acquired, thereby leading the trainees to become qualified to appear for the examination conducted by the DGCA and apply for the said ATR extension, and get employed as pilots in the commercial airlines. Furthermore, the completion of such a training programme confers certain skills relating to the flying of the specific types of aircrafts to which such ATR extension relates. * Meaning of terms recognised by law 4.29 The meaning of the term "recognised by law", is not defined under the GST law. However, it has been observed in the case of Indian Institute of Aircraft Engineering v. Union of India, 2013 (30) S.T.R. 689 (Del.) that the expression "reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch an additional aircraft at an ATO providing type rating training, as approved by the DGCA for this purpose, and make an application for the extension of the ATR in their CPL(A). 4.36 In pursuance of the above provisions, read in conjunction with Rule 133A of the Aircraft Rules, reference is made to the CAR Section 7, Series D, Part IV dated 15.03.2015 ("ATO CAR"), which deals with ATOs set up for type rating of flight crew. Relevant provisions of ATO CAR are reiterated hereunder: 2. GENERAL REQUIREMENTS 2.1 The approval of a training organization by DGCA shall be dependent upon the applicant demonstrating compliance with the requirements of this CAR. 2.2 Approved training for flight crew and shall be conducted within an approved training organization. 3. ISSUE OF APPROVAL 3.1 The issuance of an approval for a training organization and the continued validity of the approval shall depend upon the training organization being in compliance with the requirements of this CAR. Unless withdrawn, The ATO approval shall be valid for a period of five years from the date of issue of approval so long as the ATO continue meet the applicable requirements of this CAR. .... 4. TRAI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case they are seeking an ATR extension in respect of an aeroplane having AUW more than 5,700 kgs, such as an Airbus A320 or a Boeing 737NG. 4.39 In this regard, it is submitted that the ATR training can be undertaken by a pilot either independently through an ATO, or in the course of employment with a scheduled operator/commercial airline, wherein the operator/airlines send their pilots to a ATO for undertaking such training programmes. 4.40 In order to examine the nature of the training services vis-à-vis its taxability, reference is made to the judgement of the Hon'ble Delhi High Court pertaining to the Service Tax regime in Indian Institute of Aircraft Engineering v. Union of India, Supra wherein the writ petitioner was an Aircraft Maintenance Engineering Training School approved by the DGCA for providing Aircraft Maintenance Engineering ("AME") training and conducting examination as per the course curriculum approved by the DGCA. This is a training programme similar to the ones provided by ATOs. 4.41 In this case, it has been noted that at that time, under the Finance Act, 1994, the coaching or training leading to the grant of a certificate or diploma or degree or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said institute; (iv) the approval is not a onetime approval but has to be obtained year after year and at the time of each renewal DGCA has to be satisfied of existence of the compliances/parameters; (v) the institutes are obligated under para 8.4 of CAR to issue Course Completion Certificates to the students who have successfully passed the examination and completed the requisite On Job Training; (vi) that the format of the said Certificate is also approved by the DGCA; (viii) on the basis of the said Course Completion Certificate and On Job Training certificate, the students are entitled to appear in the examination held by DGCA for grant of licence to be authorized to render services of aircraft repair and maintenance." 4.44 On the basis of the above observations, it has been held that where the DGCA approves the institute providing such AME training, and exercises supervision over the same, and the training is conducted as per the syllabus prescribed and the TPM approved by the DGCA, the training provided by such an institute would be exempt from Service Tax, considering that the completion of such training at the institute is a qualification recognised by the law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entral Excise, Customs & Service Tax v. Gang Aviations Ltd., 2014 (35) S.T.R. 441 (All.). 4.52 In the latter case, the appellant was providing both flying training and AME training, and the Allahabad High Court has followed the reasoning in Indian Institute of Aircraft Engineering (supra) and held that such training services would not be leviable to Service Tax. 4.53 The decision in Indian Institute of Aircraft Engineering (supra) has also been followed in more recent cases before the CESTAT, such as in the case of Gujarat Flying Club v. CCE & ST, Vadodara-II, 2019 (5) TMI 267 - CESTAT AHMEDABAD. 4.54 Applying the ratio and reasoning of the Delhi High Court in Indian Institute of Aircraft Engineering (supra), as well as of the Allahabad High Court in Garg Aviations (supra), it is submitted that the completing the training programme offered by the Applicant will be considered as a qualification recognised under the law. 4.55 Reference is made to Circular No. 117/36/2019-GST dated 11.10.2019, which deals with the applicability of the GST exemption under Sl. No. 66(a) of the Exemption Notification to the Directorate General of Shipping ("DGS") approved maritime courses conducted b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submitted that the training provided by Applicant is the education imparted under the course approved by the DGCA, and hence, the successful completion of the ATR training programme is a qualification recognised by the law. 4.60 Thus, second condition is also satisfied in the present case. 4.61 From the above discussion, it can be seen that the requirements discussed for a ATO to qualify as an educational institution in terms of the definition under the Exemption Notification have been fulfilled, as elaborated hereunder: 4.62 Firstly, the completion of the training programme conducted by the Applicant, which allows the pilots to further apply for the extension of ATR in their CPL(A) after passing the tests conducted by the DGCA, and by way of endorsement provided by the DGCA, is recognised under the Aircraft Rules read with the ATO CAR, and in accordance with the discussion in the foregoing paragraphs, such completion of the training programme would be a qualification recognised under the law. 4.63 Secondly, the training programme conducted by the ATO, as the case may be, as specified in its TPM, has to be approved by the DGCA, thereby meaning that such training programmes fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r existing licenses, would be covered under Si. No. 66 (a) of the Notification No. 12/2017 and Si. No. 66 (a) of the state Notification dated 30.6.2017 and thereby, exempted from levy of GST. 5. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. 6. The application for advance ruling was forwarded to the Jurisdictional GST Officer to offer their comments/views/verification report on the matter and reminder dated 27.10.2022 was sent. But in this case no comments were offered. 7. The applicant was granted a personal hearing on 15.11.2022 which was attended by Shri Kunal Agarwal, the authorized representative of the applicant during which they reiterated the submissions made in the application of advance ruling. DISCUSSION AND FINDING 8. At the outset, we would like to make it clear that the provisions of both the CGST Act and the UPGST 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t.) Group or Service Code (Tariff) Description of Services Rate Condition (1) (2) (3) (4) (5) Heading 9992 Services provided - (a) by an educational institution to its students, faculty and staff (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee,. (b) to an educational institution, by way of - (i) transportation of students, faculty and staff. (ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory; (iii) security or cleaning or house-keeping services performed in such educational institution; (iv) services relating to admission to, or conduct of examination by, such institution (v) supply of online educational journals or periodicals: Provided that nothing contained in [sub-items (i), (ii) and (iii) of item (b)] shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent. Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 28.6.2017, the Educational services classifiable under HSN No. 9992 are taxable at 18% GST rate. Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) 30 Heading 9992 Education services. 9 16. We find that the applicant is engaged in the business of facilitating the training of commercial pilots on the Aircraft Simulators installed at its training facilities. Such training is provided in accordance with the training curriculum approved by the Directorate General of Civil Aviation (hereinafter referred to as "DGCA") for obtaining the extension of aircraft type ratings on their existing licenses. Now we proceed to examine as to Whether the supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses would be covered under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017. 16.1 We observe that the applicant has claimed that their organization has been approved by the DGCA as a Type Rating Training organizatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid notification, the same are not exempted. 16.3 The applicant, during the course of personal hearing, accepted that they do not provide any licence, degree or diploma certificate to the trainees. It is just the completion of training course which is mentioned. We observe that there is no statutory requirement for the course completion certificate which enables the trainee pilots to apply to DGCA for appearing in the examination conducted by it. It is the examination conducted by the DGCA which is the statutory requirement and not any examination by the applicant. The applicant is merely preparing the trainees for such Type Rating Examinations. In a clarification issued by the Chief Flight Operation Inspector DGCA on 14-12-2009, it has been mentioned that- "This to certify that this sample course completion certificate will enable the trainee to complete some of the several parameters as laid down in Schedule II, sections J and M of Indian Aircraft Rules and apply to Director(Training and Licensing) in order to obtain extension of aircraft type ratings on his professional pilots licence which is the basic requirement to render him eligible for employment as a pilot" Hence, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses would be covered under SI. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 and Si. No. 66 (a) of the Notification No. A.NI.-2-843/XI-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017, and thereby, exempted from levy of Central Goods and Service Tax & Uttar Pradesh Goods and Service Tax." Answer- Replied in negative. 20. This ruling is valid only within the jurisdiction of Authority for Advance Ruling Uttar Pradesh and subject to the provisions under Section 103(2) of the CGST Act, 2017 until and unless declared void under Section 104(1) of the Act. ----------------- Notes: 1. 5. Power of Central Government to make rules. ... (2) Without prejudice to the generality of the foregoing power, such rules may provide for- .... (g) the licensing of persons employed in the operation, manufacture, repair or maintenance of aircraft; (o) the manner and conditions of the issue or renewal of any licence or certificate under the Act or the rules, the examinations and tests to be undergone in connection therewith, the form, custody, production, endorsement, cancellation, suspension or surrender of such licenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... management of an aircraft; (iii) manufacture, storage, distribution and supply of aircraft fuel, lubricants, special products; (iv) laboratories and tests to be carried out therein; (v) training organisations for all aviation subjects except those covered under rules 418 and 114. 6. 6. Licensing of personnel. Every aircraft shall carry and be operated by the personnel prescribed in Part V and such personnel shall be licensed in the manner prescribed in that part and in Schedule II: 7. 38. Licensing Authority. (1) The authority by which the licences and ratings specified below may be granted, renewed or varied shall be the Central Government, which may withhold the grant or renewal of a licence or a rating, if for any reason it considers it desirable to do so:- (a) Student Pilot's Licence (for aeroplanes, helicopters, gliders, balloons and microlight aircraft), (b) Private Pilot's Licence (for aeroplanes and helicopters), (c) Commercial Pilot's Licence (for aeroplanes and helicopters), (d) Airline Transport Pilot's Licence (for aeroplanes and helicopters), (e) Instrument Rating (for aeroplanes and helicopters), (t) Assistant Flight Instructor's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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