Training programmes by NSDC approved partners qualify for GST exemption under Entry 69(d)(iii) of Notification 12/2017

The AAR, Telangana ruled that training programmes offered by the applicant as an approved training partner of NSDC under market-led fee-based services qualify for GST exemption under Entry 69(d)(iii) of Notification No. 12/2017. The authority held that services provided under NSDC partnership agreement dated 23.06.2022 fall within schemes implemented by NSDC, making them exempt from CGST and SGST. However, services received by the applicant from sub-contractors who are not NSDC-approved training partners remain taxable and do not qualify for exemption under this notification.

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Issues Involved:
1. Eligibility of training programs for GST exemption under NSDC schemes.
2. GST exemption applicability for training programs offered in collaboration with business partners.
3. Scope of GST exemption for the company as a whole across different states.

Detailed Analysis:

Issue 1: Eligibility of Training Programs for GST Exemption under NSDC Schemes
The applicant, M/s. Nxtwave Disruptive Technologies Private Limited, sought to determine whether their training programs, approved by the National Skill Development Corporation (NSDC), qualify for GST exemption under serial no. 69 of Notification No. 12/2017-Central Tax (Rate).

The applicant is an approved training partner of NSDC, offering programs under the "Scheme for Market Led Fee-Based Services." The scheme aims to create a sustainable skill training ecosystem through various funding models, including self-financing, loans, employer financing, and CSR contributions.

The judgment concluded that the training programs provided by the applicant fall under the category of services provided by an approved training partner of NSDC in relation to a scheme implemented by NSDC. Therefore, these services qualify for GST exemption under serial no. 69 (d) (iii) of the said notification.

Issue 2: GST Exemption Applicability for Training Programs Offered in Collaboration with Business Partners
The applicant also queried whether training programs offered in collaboration with other business partners, imparted under a subcontract, would qualify for the same GST exemption.

The judgment clarified that while the services provided directly by the applicant as an approved training partner of NSDC are exempt, this exemption does not extend to services received from subcontractors. Subcontractors who are not approved training partners of NSDC or the Sector Skill Council do not qualify for the exemption.

Issue 3: Scope of GST Exemption for the Company as a Whole Across Different States
The applicant sought clarification on whether the GST exemption applies to the company as a whole, beyond just the Telangana GST Act, as long as the services meet the criteria laid down under serial no. 69 of the notification.

The judgment affirmed that the GST exemption applies to services supplied by the applicant as an approved training partner of NSDC across all states, not limited to Telangana. However, only those services that fall under the specified category of approved training programs are eligible for this exemption.

Conclusion:
1. Eligibility of Training Programs for GST Exemption: Yes, the services offered by the applicant fall under SI.No.69 (d) (iii) of Notification No. 12/2017 of CGST notifications and are therefore eligible for exemption under this notification for CGST and SGST.
2. GST Exemption Applicability for Training Programs Offered in Collaboration with Business Partners: No, the exemption does not extend to services received from subcontractors who are not approved training partners of NSDC or the Sector Skill Council.
3. Scope of GST Exemption for the Company as a Whole Across Different States: The exemption applies to the services supplied by the applicant as an approved training partner to NSDC across all states, provided they meet the criteria laid down under serial no. 69 of the notification.

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