Recognised licensing training excluded from commercial coaching tax where law mandates approved training and certificate recognition.

Training for candidates seeking insurance-agent licences was treated as part of a legally regulated licensing process rather than ordinary commercial coaching. The statutory scheme under the Insurance Regulatory and Development Authority Act, 1999, the Insurance Act, 1938, and the Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000 required approved practical training and a prescribed examination, and the completion certificate issued by the institute had recognition in law. On that basis, the exclusion for institutions issuing a certificate or other educational qualification recognised by law applied, and the training was not taxable as commercial training or coaching service under section 65(27) of the Finance Act, 1994.

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Issues: Whether the training imparted for candidates seeking insurance-agent licences was covered by the definition of commercial training or coaching centre under section 65(27) of the Finance Act, 1994, or stood excluded because the training and completion certificate were recognised by law.

Analysis: The statutory scheme under the Insurance Regulatory and Development Authority Act, 1999, the Insurance Act, 1938, and the Insurance Regulatory and Development Authority (Licensing of Insurance Agents) Regulations, 2000 required an applicant to undergo practical training from an approved institution and thereafter pass the prescribed examination. The certificate of completion issued by the institute was thus part of a legally regulated process and had recognition in law. The exclusion in section 65(27) applies where the institute issues a certificate, diploma, degree, or other educational qualification recognised by law. The reasoning in the Delhi High Court decision on recognised training courses was followed, and the contrary reliance on cases dealing with unrecognised coaching activity was distinguished.

Conclusion: The training imparted by the appellant was not taxable as commercial training or coaching service under section 65(27) of the Finance Act, 1994 and the assessee succeeded on merits.

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