2018 (10) TMI 681 - AAR - GST

NSDC Approval Not Enough: Applicant Ineligible for GST Exemption

In Re: IMS Proschool Pvt. Ltd.

The ruling concluded that the educational courses offered by the applicant, even if approved, conditionally approved, or upgraded by NSDC, do not qualify ... Classification of education services rendered by appellant - Appellant is approved by National Skill Development Corporation - National Skill Development Programme - whether merit classification under HSN 9992 or otherwise? - exemption under N/N. 12/2017 Central tax (Rate) dated 28th June 2017. Whether educational courses offered by the Applicant which have been approved by National Skill Development Corporation (NSDC) would be construed as in relation to National Skill Development Programme implemented by NSDC? - whether they are eligible for exemption from GST as per Serial No. 69 of Notification No. 12/2017 Central tax (Rate) dated 28th June 2017 and if so, in respect of which services being provided by them would they be eligible for exemption under Sr.No. 69 of the above said Notification? The Applicant offers certain educational courses for which qualification standards / framework i.e. QP/ NOS has not been defined by NSDC and will be approved by NSDC as and when the relevant QP/ NOS would be defined by NSDC. In the interim period, NSDC has given exceptional approval on such courses. Till the time QP/ NOS are defined for such educational courses and are eventually approved by NSDC, whether such courses will be treated as in relation to National Skill Development Programme implemented by NSDC? In certain situations, NSDC approved educational courses are subsequently, upgraded by the Applicant within pre-defined QP/ NOS framework, by way of adding more topics/ content /modules. However, such modified version of NSDC approved educational courses have not been approved by NSDC yet. Whether such modified version will be treated as in relation to National Skill Development Programme implemented by NSDC? If the answer to Q.1, Q.2 and Q.3 are Yes, then whether the benefit of GST exemption as per Notification No. 14/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? If answer to Q.4 is Yes, whether benefit of GST exemption as per Notification No. 17/2017-Central Tax (Rate), dated the 28th June 2017 would be still available if such educational courses are offered to corporates and business institutions? Whether the NSDC approved educational courses which are actually imparted by the business partners of the Applicant, on behalf of the Applicant as sub-contractor of Applicant, at various centres located across the country, will be considered as offered by the Applicant? If answer to Q.6 is Yes, whether benefit of GST exemption as per Notification No. 17/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? Held that:- NSDC was set up as a part of National Skill Development Mission to fulfil the growing need in India for skilled manpower across sectors and narrow the existing gap between the demand and supply of skills. Its main objective was and is to contribute significantly to the overall target of skilling up people in India mainly by fostering private sector initiatives in skill development, programmes and to provide funding - further, National Skill Development Mission was launched on 15th July, 2015 with the objective to provide overall institutional framework to rapidly implement and scale up the skill development efforts across India. The Ministry of Skill Development & Entrepreneurship, through the National Skill Development Corporation (NSDC), has taken up multiple initiatives to connect with industries for partnership under the larger Skill India Mission. NSDC has a single-window facilitation system that offers a unique platform for the industries to partner on various such initiatives. NSDC works with diverse set of stakeholders such as Corporates, Foundations, Government and Community based Organisations in structuring high impact collaborative skill development projects. The benefit of exemption as given at Sr. NO. 69 of Notification 12/2017-CT (Rate) as claimed to be applicable by the applicant in the present case is in respect of any services provided by a training partner approved by the NSDC or the Sector Skill Council in relation to the National Skill Development Program implemented by the NSDC or any other scheme implemented by the NSDC. The objective of the National Policy on Skill Development and Entrepreneurship, 2015 will be to meet the challenge of skilling at scale with speed and standard (quality). It will aim to provide an umbrella framework to all skilling activities being carried out within the country, to align them to common standards and link the skilling with demand centres. In addition to laying down the objectives and expected outcomes, the effort will also be to identify the various institutional frameworks which can act as the vehicle to reach the expected outcomes. The national policy will also provide clarity and coherence on how skill development efforts across the country can be aligned within the existing institutional arrangements. This policy will link skills development to improved employability and productivity. Some of the courses of vocational training that have been designed by the applicant are approved and certified by NSDC and thus we find that the services in this respect being in the nature of approval and certification of course being provided by NSDC to the applicant and not by the applicant to NSDC and thus there is no question of the applicant being eligible for any exemption in this respect as they are a services recipient and not service provider in relation to NSDC. In National Skill Development Programme there are two parts. One is Skill Development Programme which is very vast in scope and all public, private or individual efforts at skill development undertaken throughout the country by everybody would be covered under it. However once prefix ‘National’ is put before the phrase ‘Skill Development Programme’ it becomes National Skill development Programme and it limits its scope and restricts it only to the activities/ efforts that are undertaken through Government funding, Government Schemes and specifically designed Government Programmes - National Skill Development Programme would consist of the schemes, actions and deeds that are actually done or are mandated to be done by various ministries, Government departments or their attached offices, Directorates or other institutions as per their instructions and for which expenses in that regard are to be incurred by the Central or State Governments through budgetary provisions. The intent of the Notification No. 12/2017-CT provides that exemption would be available only in respect of “Any services provided by a Training partner approved by National Skill Development Corporation in relation to the National Skill Development Programme implemented by the NSDC. If the intent of the Legislature had been to extend the benefit of exemption of present Notification in respect of all activities in relation to skill development done by NSDC, in that case the wordings Of the Notification would not have been restrictive, which is very clear when we see that in the Notification, exemption benefit is restricted and would be applicable only in respect of services provided in relation to national Skill Development Programme implemented by NSDC. Thus, the National Skill Development Programme would cover only the actual schemes and programmes of skill development that are undertaken by the Government through its various ministries, departments, directorates, attached offices and organizations and cannot in any way be construed to be including each and every activity under the sun which enhances skills in one way or other. Ruling:- The educational courses offered by the Applicant which have been approved by National Skill Development Corporation would not be construed as in relation to National Skill Development Programme implemented by NSDC. The Educational courses for which qualification standards / framework i.e. QP/ NOS has not been defined by NSDC will not be treated as in relation to National Skill Development Programme implemented by NSDC. The modified version of NSDC approved educational courses will not be treated as in relation to National Skill Development Programme implemented by NSDC. The benefit of GST exemption as per Notification No. 14/2017- Central Tax (Rate), dated the 28th June 2017 would not be available to the Applicant. The Benefit of GST exemption as per Notification No. 17/2017-Central Tax (Rate), dated the 28th June 2017 would not be available if such educational courses are offered to corporates and business institutions. Other questions not answered. Issues Involved:1. Whether educational courses approved by NSDC are related to the National Skill Development Programme implemented by NSDC.2. Treatment of courses conditionally approved by NSDC until QP/NOS is defined.3. Status of upgraded NSDC-approved courses pending further approval.4. GST exemption eligibility under Notification No. 12/2017 for courses related to NSDC programs.5. GST exemption applicability if courses are offered to corporates and business institutions.6. Consideration of courses imparted by business partners as offered by the applicant.7. GST exemption eligibility for courses imparted by business partners.Detailed Analysis:Issue 1: Educational Courses Approved by NSDCThe applicant sought clarity on whether educational courses approved by NSDC are construed as part of the National Skill Development Programme implemented by NSDC. The ruling concluded that simply having courses approved by NSDC does not automatically imply they are part of the National Skill Development Programme. The applicant did not provide explicit confirmation from NSDC regarding the specific programs implemented under the National Skill Development Programme. Thus, the courses cannot be deemed as related to the said program.Issue 2: Conditionally Approved CoursesThe applicant queried about the treatment of courses that have received conditional approval from NSDC until the relevant QP/NOS is defined. The ruling stated that such courses, even with conditional approval, do not qualify as part of the National Skill Development Programme until they receive full approval with defined QP/NOS. Therefore, these courses are not considered in relation to the National Skill Development Programme.Issue 3: Upgraded NSDC-Approved CoursesThe applicant asked if upgraded versions of NSDC-approved courses, which have not yet received further approval, would be treated as part of the National Skill Development Programme. The ruling determined that without explicit approval of the upgraded courses from NSDC, these modified versions do not qualify as part of the National Skill Development Programme.Issue 4: GST Exemption EligibilityThe applicant sought confirmation on GST exemption eligibility under Notification No. 12/2017 if the answers to the previous questions were affirmative. Given the negative responses to Issues 1, 2, and 3, the ruling concluded that the applicant is not eligible for GST exemption under the specified notification for the courses in question.Issue 5: GST Exemption for Courses Offered to CorporatesThe applicant queried whether GST exemption would still apply if the educational courses are offered to corporates and business institutions. The ruling emphasized that since the courses do not qualify as part of the National Skill Development Programme, the question of GST exemption does not arise, irrespective of the recipient's nature.Issue 6: Courses Imparted by Business PartnersThe applicant asked if courses imparted by their business partners on their behalf would be considered as offered by the applicant. The ruling found this question irrelevant given the negative responses to the primary issues, thus it was not addressed.Issue 7: GST Exemption for Courses by Business PartnersThe applicant queried about the GST exemption eligibility for courses imparted by business partners. The ruling reiterated that since the courses do not qualify as part of the National Skill Development Programme, GST exemption is not applicable, regardless of whether the courses are imparted by business partners.Conclusion:The educational courses offered by the applicant, whether approved, conditionally approved, or upgraded, do not qualify as part of the National Skill Development Programme implemented by NSDC. Consequently, the applicant is not eligible for GST exemption under Notification No. 12/2017 for these courses, even if offered to corporates or imparted by business partners.