2022 (4) TMI 1236 - AAAR - GST

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

In Re: M/s. Tamilnadu Skill Development Corporation

The AAAR dismissed an appeal against a lower authority's ruling on GST exemption for a state corporation providing training to unemployed youth. Though ... Benefit of exemption - Requirement of registration under National Skill Development Corporation - State Government has formed this corporation for giving Training to unemployed youth - requirement of registration under the act vide G.O. No.73, Commercial Taxes and Registration (B1), 29th June 2017, Serial No. 69 Heading 9992 or Heading 9983 or Heading 9991 and Serial No. 70 Heading 9985 - Government entity or not - time limitation - HELD THAT:- Prima facie, the appeal is made against Order dated 25.02.2021, which was received on 02.03.2021. The appeal stands filed with a delay of 9 months in filing the appeal. The appellant has requested to condone the delay and to admit the application - Hon'ble Supreme Court IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2022 (1) TMI 385 - SC ORDER], has modified its Order dated 23rd September 2021 and has held that the period from 15th March 2020 to 28th February 2022 would stand excluded for the purpose of Limitation in IN RE: COGNIZANCE FOR EXTENSION OF LIMITATION [2021 (11) TMI 387 - SC ORDER]. Therefore, the appeal is to be considered as filed within the timeline and admitted for consideration on merits. The facts of whether the appellant is a 'Government entity', whether all the activities are extended only to the State Government and whether the consideration received is limited to the 'grants' are fresh facts to be verified/analysed with the respective documentary proof - it is clear that this authority can either confirm or modify the facts examined by the LA and ruling extended. It is evident that the appellant seeks ruling on a different set of facts which were not put forth before the LA. The appellant has not contested the basis of the ruling extended by LA and accepts that after receipt of the ruling by the LA, they have been now guided and rightly so that they are not to be required on the application of Entry 9C, which is a new ground not examined by the LA and therefore this forum cannot adduce any ruling on the same. The appellant has not contested the applicability of the entries 69 & 70 of the Notification, on the support of which, they had claimed exemption for registration before the LA. There appears no reason to interfere with the ruling of the LA - Appeal dismissed. 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.