State corporation's GST exemption appeal dismissed despite COVID delay admission for youth training programs

The AAAR dismissed an appeal against a lower authority's ruling on GST exemption for a state corporation providing training to unemployed youth. Though the appeal was filed with a 9-month delay, it was admitted due to SC's limitation extension during COVID-19 period. The appellant sought ruling on different facts not examined by the lower authority, including whether they qualified as a government entity and whether consideration was limited to grants. The AAAR found the appellant had not contested the original ruling's basis regarding notification entries 69-70 and accepted new guidance on Entry 9C applicability. Finding no grounds to interfere with the lower authority's decision, the appeal was dismissed.

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Issues Involved:
1. Requirement for registration under GST for Tamil Nadu Skill Development Corporation (TNSDC).
2. Applicability of GST exemption under Entry 69 and Entry 70 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017.
3. Consideration of Entry 9C of Notification No. 12/2017-C.T.(Rate) as a basis for GST exemption.

Detailed Analysis:

1. Requirement for Registration under GST for TNSDC:
The appellant, Tamil Nadu Skill Development Corporation (TNSDC), sought clarification on whether they are required to be registered under GST. They argued that since the National Skill Development Corporation (NSDC) is registered under GST, TNSDC, which performs similar functions, should also be exempt from registration.

The Original Authority ruled that TNSDC is not exempted under Entry 69 and Entry 70 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 and therefore required to be registered under the CGST/TNGST Act 2017.

2. Applicability of GST Exemption under Entry 69 and Entry 70 of Notification No. 12/2017-C.T.(Rate):
The appellant contended that their activities align with those of NSDC, which is exempt under Entries 69 and 70 of the said notification. They argued that TNSDC, being a government entity providing skill development training funded by government grants, should also be exempt.

The Appellate Authority noted that the appellant did not contest the findings of the Lower Authority regarding the inapplicability of Entries 69 and 70. The Lower Authority had examined these entries and concluded that TNSDC's activities do not qualify for exemption under these specific entries, necessitating GST registration.

3. Consideration of Entry 9C of Notification No. 12/2017-C.T.(Rate) for GST Exemption:
In their appeal, TNSDC introduced a new argument, claiming that their services fall under Entry 9C of the same notification, which exempts services provided by a government entity to the government against consideration in the form of grants.

The Appellate Authority highlighted that Entry 9C was not part of the original application and thus was not considered by the Lower Authority. The facts regarding TNSDC being a government entity, the nature of their activities, and the receipt of grants need verification and analysis with documentary proof, which was not presented before the Lower Authority.

The Appellate Authority emphasized that under Section 100(1) of the GST Act, it can only confirm or modify the ruling based on the facts examined by the Lower Authority. Since the appellant introduced new grounds not previously examined, the Appellate Authority could not provide a ruling on Entry 9C.

Conclusion:
The appeal was dismissed, and the Appellate Authority upheld the Original Ruling that TNSDC is required to be registered under GST, as the appellant did not contest the applicability of Entries 69 and 70 and introduced new grounds not examined by the Lower Authority. The Appellate Authority left it open for TNSDC to approach the Lower Authority separately with the new grounds if they choose to do so.

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