Industry partner's reimbursement to students' stipend not taxable under GST. Insurance and uniform expenses not addressed.

The AAR ruled that the reimbursement by the industry partner to YAS of the stipend paid to students does not attract GST. The questions regarding the reimbursement of insurance premiums and expenses for uniforms and safety shoes were withdrawn by the applicant and hence were not addressed by the AAR.

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Issues Involved:
1. Whether the reimbursement by Industry Partner to YAS of the stipend paid to students attracts GSTRs.
2. Whether the reimbursement by Industry Partner to YAS of the insurance premium attracts GSTRs.
3. Whether the reimbursement by Industry Partner to YAS of the expenses for uniform and safety shoes attracts GSTRs.

Detailed Analysis:

1. Reimbursement of Stipend:
The applicant, Yashaswi Academy for Skills (YAS), is registered as a 'not for Profit Company' and acts as a Third Party Aggregator under the Apprentice Act 1961. YAS enters into agreements with industry partners to provide on-the-job training to apprentices. The industry partners are required to pay stipends to the apprentices, which are routed through YAS. YAS prepares the monthly attendance, processes, and disburses the stipends to the apprentices' bank accounts without making any deductions. The applicant argues that they act as a pure agent for the industry partner, and the stipend reimbursement should not attract GST.

The Authority for Advance Ruling (AAR) concluded that YAS acts merely as a conduit for the stipend payments. The service is provided by the trainees to the industry partners, and YAS is not allowed to retain any part of the stipend. Therefore, the reimbursement by the industry partner to YAS of the stipend paid to students does not attract GST.

2. Reimbursement of Insurance Premium:
The applicant initially sought a ruling on whether the reimbursement of insurance premiums paid for Employee Compensation and Personal Accident policies attracts GST. YAS takes out these insurance policies in the name of the trainees and the industry partner. The applicant argued that if any tax is liable, it should be collected by the insurance company, and the reimbursement to YAS should not be taxable.

However, during the proceedings, the applicant withdrew this question. Therefore, the AAR did not provide a ruling on this issue.

3. Reimbursement of Expenses for Uniform and Safety Shoes:
YAS also sought a ruling on whether the reimbursement of expenses for uniforms and safety shoes provided to trainees attracts GST. These items are purchased by YAS as per the requirements of the industry partners. The applicant argued that they act as a pure agent and the reimbursement should not be taxable.

Similar to the insurance premium issue, the applicant withdrew this question during the proceedings. Consequently, the AAR did not provide a ruling on this issue.

Conclusion:
The AAR ruled that the reimbursement by the industry partner to YAS of the stipend paid to students does not attract GST. The questions regarding the reimbursement of insurance premiums and expenses for uniforms and safety shoes were withdrawn by the applicant and hence were not addressed by the AAR.

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