TMI Blog2023 (6) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... 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? - HELD THAT:- The applicant does not provide any licence to the pilots as they are not the competent authority. Issuance and granting of commercial pilot licenses falls under the exclusive domain of DGCA. The applicant is only conducting training courses which helps the trainees to increase/accumulate ratings for flying specific aircrafts. Moreover, the trainees will have to undergo skill test when they complete simulator training at the institute. It is based on the results of these tests and examination and after fulfillment of other parameters that the DGCA would endorse the type ratings of aircraft in the licenses of trainee pilots. Therefore merely conducting a course or its completion is not a qualification which is recognized by law. The fact that such a completion of course may be taken into account by the DGCA for the purpose of evaluating the experience and content of training, will not make it statutory in character. The applicant, during the course of personal heari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Agarwal, Advocate ORDER UNDER SECTION 98(4) OF THE CGST ACT, 2017 UNDER SECTION 98 (4) OF THE UPGST ACT, 2017 1. M/s CAE Simulation Training Private Limited, Sector KP-III, 25/3, Gautam Budh Nagar, Greater Noida, Uttar Pradesh 201306 (here in after referred to as the applicant) is a registered assessee under GST having GSTIN: 09AAECC7113K1ZL. 2. The applicant has submitted an application for Advance Ruling dated 05.09.2022 enclosing dully filled Form ARA-01 (the application form for Advance Ruling) along with annexure and attachments. The applicant in his application has sought advance ruling on following question- 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 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 Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aircraft Rules enumerates the list of licenses and ratings that can be issued by the Government of India. 3.6 Further, Rule 6A 8 provides that no person shall fly as pilot of an aircraft, which is not included in the aircraft rating of his license. 3.7 Furthermore, Rule 41 9 of the Aircraft Rules provides that the applicants for licences and ratings shall produce proof of having acquired the flying experience and having passed satisfactorily the test and examinations specified in Schedule II in respect of the licence or rating concerned. 3.8 Sub-section 4 of Section J of Schedule II to the Aircraft Rules provides that a licence shall indicate the types of aircrafts the holder is entitled to fly in the form of aircraft ratings, and sub-section 5 provides for the extension of such aircraft rating to include an additional type of aircraft in their license, and in order to extend such aircraft rating, the pilot has to make an application to the 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. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill tests and checks, and thereafter, they have to file an application for the extension of ATR, and as discussed in the foregoing paragraphs, the documents required to be submitted with the said application have to be issued by the ATO from where the applicant pilot has completed the ATR training. 3.16 The agreements with the trainees are still continuing and would continue to supply these services in the coming years. 4. The applicant has submitted their interpretation of law as under- 4.1 In the understanding of the Applicant, as referred in the facts above, the Applicant is an ATO approved by the DGCA and is engaged in supply of ATR training to commercial pilots in accordance with the training curriculum approved by the DGCA for obtaining the extension of aircraft type ratings on their existing licenses, and therefore, would be covered under Sl. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 (hereinafter referred to as Notification No. 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, ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion services comparable to the regular education system, cf 99924, 99925 - cultural education services, cf 999291 - education services provided by instructors, coaches, etc., as part of sporting activities, cf. 999292 4.6 Further reference has to be made to the Notification No. 11/2017 - Central Tax (Rate) dated 28.06.2017 (hereinafter referred to as Notification No. 11/2017 ), Notification No. KA.NI.-2-842/XI-9(47)/17- U.P. Act-1-2017-Order- (09) -2017 dated 30.6.2017 (hereinafter referred to as state rate notification ), the Notification No. 12/2017 and Notification dated 30.6.2017. 4.7 The relevant entry of the Notification No. 11/2017 is produced hereunder: 30 Heading 9992 Education services. 9 - 4.8 The relevant entry of the state rate notification is produced hereunder: 30 Heading 9992 Education services. 9 - 4.9 The relevant entry of the Notification No. 12/2017 and the Explanation in that regard have been extracted below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as reiterated above Sl. No. 66 (a) of the Notification No. 12/2017 and SI. No. 66 (a) of the Notification dated 30.6.2017 are pari materia and have the same explanation to the said entry. Therefore, a reference to the Sl. No. 66 (a) of the Notification. No. 12/2017 would also mean reference to the corresponding exemption entry no. 66 (a) of the state Notification dated 30.6.2017. ANALYSIS OF APPLICABLE PROVISIONS AS PER APPLICANT 4.14 In the present case, the Applicant is an ATO approved by the DGCA and is engaged in supply of ATR training to commercial pilots in accordance with the training curriculum approved by the DGCA for obtaining the extension of aircraft type ratings on their existing licenses. 4.15 These services, by virtue of SAC 999294 under the Explanatory Notes qualifies as education services. However, for the supply to fall under Si. No. 66 (a) of the Notification No. 12/2017, it is imperative that the education and training services provided by the Applicant to its trainees are in the nature of the services provided by an educational institution to its students. 4.16 Reference is also made to Circular No. 85/04/2019-GST dated 1.1.2019 (hereinafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning given by the Applicant will be covered under the fold of education. 4.24 It is submitted that the training/education 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 form a part of the curriculum approved by the DGCA for completing the training required for applying for ATR extension. 4.25 Thus, first condition is satisfied in the present case. II. Training/education services supplied by the Applicant is towards obtaining a qualification recognized by law Meaning of term qualification 4.26 It is submitted that term qualification has not been defined under the GST Act, thus, resort has to be made to dictionary meanings, which are as under: b) In accordance with the Advanced Law Lexicon by P. Ramanatha Aiyar, qualification has been defined as the, fitness or capacity of the party for a particular pursuit or profession , whether such capacity is natural or acquired through training. In a different context, the same term has been defined as qualities, accomplishments, etc. which qualify a person for some office or function. c) the Black s L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been laid down for determining legal rights and legal obligations, which are recognized by the Courts. Furthermore, in the case of R.S. Nayak v. A.R. Antulay (1984) 2 SCC 183, it was held that the law includes any ordinance, by-law, rule, regulation, notification, custom or usage having the force of law. 4.32 From a perusal of these decisions, it can be said that a qualification recognised by the law refers to any qualification which derives its authorisation from any statute, ordinance, by-law, rule, regulation, notification, custom, usage, and so on. Applicability of aforesaid meanings to present case 4.33 As reiterated above (i) Applicant is providing ATR training courses, (ii) the trainees of the Applicant need to hold a CPL (A) before embarking upon the training provided by the Applicant, (iii) the stages of training provided by the Applicant, and (iv) the application that has to be made for the extension of ATR, for which documents issued and certified by the Applicant have to be provided. 4.34 It is submitted that Rule 6A of the Aircraft Rules provides that the type of aircraft that can be flown by a person has to be included in the rating provided on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed student records to show that all requirements of the training course have been met as agreed by the DGCA. 11. OVERSIGHT DGCA shall maintain an effective oversight programme of the approved training organization to ensure continuing compliance with the approval requirements. 4.37 Under the ATO CAR, the pertinent clauses have been summarised hereunder: a. The training organisation has to comply with the conditions and requirements provided under the CAR, in order to receive a certificate of approval from the DGCA, and it has to continue such compliance in order to continue to hold/renew such certificate of approval. b. The approved ATO has to issue a Training and Procedures Manual ( TPM ) specifying its training programme, and such training programme has to be approved by the DGCA. c. The DGCA can authorise a ATO to conduct the examination required for the issuance of a license or rating, which shall be conducted by the personnel authorized by the DGCA or the personnel designated by the ATO in accordance with DGCA approved criteria. d. The ATO will have to maintain detailed trainee records to show that all the requirements of completion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lify under any of the exclusions to the commercial training and coaching centres, and thereby, it was leviable to Service Tax. This Instruction was also under challenge before the Delhi High Court. 4.43 In the course of arriving at the decision, the High Court in the case of Indian Institute of Aircraft Engineering (Supra) has noted the following: 14. We have wondered, what could be the reason for exempting from payment of service tax those training or coaching centres, even though commercial, whose certificate/degree/diploma/qualification is recognized by law. The only plausible reason, according to us, can be to exclude from ambit of service tax those training or coaching centres which are otherwise regulated by any law in as much as recognition of certificate/degree/diploma/qualification conferred by such training or coaching centres will necessarily entail regulation by the same law of various facets of such training or coaching centres. 15. Seen in that light, there can be no doubt whatsoever that the activities of the petitioner are very much regulated by the Act and the Rules aforesaid and the instructions/regulations issued thereunder from time to time. 16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifying the repair, maintenance or airworthiness of an aircraft, and a further license is required to be issued by the DGCA on passing an examination in this regard, it cannot be said that such qualification is not one recognised by the law. 4.47 On the basis of this reasoning, the Delhi High Court had quashed the ST Instruction issued by the CBEC and held that the training services provided by an institute approved by the DGCA would be exempt from the levy of Service Tax. 4.48 The decision of the Delhi High Court has been challenged before the Hon ble Supreme Court by the Department, and in 2014, the Apex Court imposed a stay on the decision of the High Court till further orders, as reported at 2014 (2) TMI 1320 - SC ORDER . Further, they have admitted a special leave petition in this regard in 2017, as reported at 2017 (50) S.T.R. J154 (S.C.). 4.49 Attention is invited to the fact that the Department has withdrawn the appeal filed before the Supreme Court against the Indian Institute of Aircraft Engineering, due to the low tax effect, as on 19.11.2020, and therefore the stay on the said decision of the Delhi High Court can be considered to have been effectively vac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the courses conducted by them are exempt from levy of GST. The exemption is subject to meeting the conditions specified at Sl. No. 66 of the notification No. 12/ 2017-Central Tax (Rate) dated 28.06.2017. 7. This clarification applies, mutatis mutandis, to corresponding entries of respective IGST, UTGST, SGST exemption notifications . Difficulty if any, in the implementation of this circular may be brought to the notice of the Board. 4.56 The reasoning behind this clarification has been discussed in Agenda Notes of the 37 th GST Council Meeting dated 20.09.2019, wherein the issue of granting Service Tax/GST exemption to the DGS approved courses has been discussed. 4.57 In this discussion, it was noted that the MTIs are authorized to grant training certificates to their students for making them eligible to appear in the competency examination conducted by the DGS to get the Certificate of Competency. Since the MTIs and their training courses are approved by the DGS under the provisions of the Merchant Shipping Act, 1958 read with the Merchant Shipping (Standards of Training, Certification and Watch-keeping for Seafarers) Rules, 2014, and taking into consideration th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctionary student has been defined to mean a person who studies, a person formally engaged in learning. Also, as per Wikipedia student has been defined to be person studying for a specific profession. In present case, since, the pilots undergo the training given by the applicant for obtaining the extension of aircraft type ratings on their existing licenses, pilots will fall under the category of students as provided under Sl. No. 66 (a) of the Notification No. 12/2017. 4.66 In the present case, Applicant is one such training organisation providing ATR training, in collaboration with various commercial airlines, and thus, on the basis of the above discussion, it can be said that Applicant qualifies to be an educational institution, and the training services provided by it to its trainees will be exempt from GST under Sl. No. 66(a) of the Notification No. 12/2017. 4.67 In conclusion to the above discussion, the training services provided by Applicant to its trainees are in the nature of education services covered under SAC 999294, and they would be covered under Si. No. 66(a) of the Notification No. 12/2017, thereby making such supply of services exempt under GST law. 4.68 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following issues on which advance ruling is required- (1) Applicability of a notification issued under the provisions of the Act (2) Determination of the liability to pay tax on any goods or services or both At the outset, we find that the issue raised in the application is squarely covered under Section 97(2) of the CGST Act 2017. We therefore, admit the application for consideration on merits. 10. We have gone through the submissions made by the applicant and have examined the same. We observe that the applicant has sought advance ruling on the following questions- 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 Sl. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 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, and thereby, exempted from levy of Central Goods and Service Tax Uttar Pradesh Goods and Service Tax. 11. The relevant por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course. Nil Nil 12. Following amendments were made in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 vide Notification No. 02/2018-Central Tax (Rate) dated 25.01.2018. against serial number 66, in the entry in column - (i) after item (a), the following item shall be inserted, namely:- (aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee; ; (ii) in item (b),- (A) in sub-item (iv), the words upto higher secondary shall be omitted; (B) after sub-item (iv), the following sub-item shall be inserted, namely: - (v) supply of online educational journals or periodicals: ; (C) in the proviso, for the word, brackets and letter entry (b) , the words, brackets and letters sub-items (i), (ii) and (iii ) of item (b) shall be substituted,. (D) after the proviso, the following proviso shall be inserted, namely:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 organization and they are conducting Type Rating Courses for pilots who are already holding CPL(A) as per DGCA approved curriculum. The training of pilots on simulators is just for obtaining the extension of aircraft type ratings on their existing licenses. The applicant does not provide any licence to the pilots as they are not the competent authority. Issuance and granting of commercial pilot licenses falls under the exclusive domain of DGCA. The applicant is only conducting training courses which helps the trainees to increase/accumulate ratings for flying specific aircrafts. Moreover, the trainees will have to undergo skill test when they complete simulator training at the institute. It is based on the results of these tests and examination and after fulfillment of other parameters that the DGCA would endorse the type ratings of aircraft in the licenses of trainee pilots. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome 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 cannot be construed that the applicant is an educational institute which provides services by way of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force. 16.4 The applicant has declared that the training course conducted by them enables the pilots to get employment in the commercial airlines. This view of the applicant is not supported by the facts. Because the trainees after undergoing type rating training courses with the applicant will not be able to get employment with the airlines directly. As per Rule 6A of the Aircraft Rules, no person shall fly as pilot of an aircraft which is not included or entered in the Aircraft rating of the licence. Meaning thereby, a trainee can fly an aircraft and consequently seek employment with an airlines only after his or her licence has been endorsed wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployed 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 licence or certificate, or of any log-book; 2. 5A. Power to issue directions. (1) The Director General of Civil Aviation or any other officer specially empowered in this behalf by the Central Government may, from time to time, by order, issue directions, consistent with the provisions of this act and the rules made thereunder, with respect to any of the matters specified, in 6[clauses (aa), (b), (c), (e), (f), (g), (ga), (gb), (gc), (h), (i), (m) and (qq) of sub-section (2) of section 5, to any person or persons using any aerodrome or engaged in the aircraft operations, air traffic control, maintenance and operation of aerodrome, communication, navigation, surveillance and air traffic management facilities and safeguarding civil aviation against acts of unlawful interference, in any case where the Director General of Civil Aviat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;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 Rating (for aeroplanes and helicopters), (g) Flight Instructor's Rating (for aeroplanes and helicopters), (h) Pilot's Licence (for gliders, balloons and microlight aircraft), (i) Student Flight Navigator's Licence, (j) Flight Navigator's Licence, (k) Student Flight Engineer's Licence (l) Flight Engineer's Licence, (m) Flight Radio Telephone Operator's Licence, (n) Flight Radio Telephone Operator's Licence (Restricted); 8. 6A. Type of aircraft to be included in rating. No person shall fly as pilot of an aircraft which is not included or entered in the aircraft rating of the licence except as provided in rules 68 and 6C. 9. 41. Proof of competency. Applicants for licences and ratings shall produce proof of having ..... X X X X Extracts X X X X X X X X Extracts X X X X
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