Vocational training exemption upheld for hospitality courses; later narrowing amendment applied prospectively.

Vocational training institutes providing courses that impart employable skills can qualify for exemption from service tax under Notification No. 24/2004, even where the courses are not separately approved by competent authorities, if the training is directed to a specialised area and enables employment or self-employment. On the facts, courses in the hospitality sector were treated as falling within that exemption. The later 2010 amendment narrowing the scope of the exemption was held to be prospective and not applicable to the disputed period, so the service tax demand and penalties could not be sustained.

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Issues: Whether the appellant was entitled to exemption under Notification No. 24/2004 dated 10.09.2004 as a vocational training institute in respect of the courses conducted by it.

Analysis: The service tax demand was based on the view that the courses conducted by the appellant were not approved by competent authorities and therefore did not qualify for exemption. The Tribunal noted that the relevant notification exempted commercial training or coaching provided by a vocational training institute, where the training imparted skills enabling the trainee to seek employment or undertake self-employment. On the facts, the courses were directed to a specialized area of hospitality industry and were intended to impart employable skills. The Tribunal also relied on the view that the later amendment of 2010 restricting the scope of exemption was prospective and that the present dispute related to the period prior to that change.

Conclusion: The appellant's courses were held to fall within the exemption, and the service tax demand and penalties could not survive.

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