Online upskilling platform services qualify for GST exemption under entry 69 of Notification 12/2017 as approved NSDC training partner

The AAR Karnataka ruled that the applicant's online upskilling platform services qualify for GST exemption under entry 69 of Notification No. 12/2017-Central Tax (Rate). The applicant satisfied both required conditions: being an approved training partner of NSDC and providing services under NSDC's Market led Fee-based Services scheme. The AAR held that since both conditions were met, the services are exempt from GST.

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ISSUES PRESENTED AND CONSIDERED

1. Whether the services provided by the applicant under the "Market led Fee-based Services" scheme implemented by the National Skill Development Corporation (NSDC) attract GST or are exempt.

2. Whether the applicant, as an NSDC-approved training partner under the said scheme, satisfies the conditions of Entry 69 of Notification No. 12/2017-Central Tax (Rate) for Nil rate exemption.

ISSUE-WISE DETAILED ANALYSIS

Issue 1 - Applicability of Nil-rate exemption under Entry 69 of Notification No. 12/2017-Central Tax (Rate) to services rendered under the "Market led Fee-based Services" scheme

Legal framework: Entry 69 of Notification No. 12/2017-Central Tax (Rate) (as reproduced in the record) grants Nil rate (exemption) to "Any services provided by" several specified NSDC-related entities, expressly including "a training partner approved by the National Skill Development Corporation or the Sector Skill Council," provided the services are "in relation to" (i) National Skill Development Programme implemented by NSDC, or (ii) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme, or (iii) any other Scheme implemented by NSDC.

Precedent treatment: The applicant cited a prior advance ruling (M/s Nxtwave Disruptive Technologies Private Limited) as supportive authority. The Authority noted the citation but based its conclusion on statutory notification conditions and documentary proof of approval and engagement under the NSDC scheme. The earlier ruling was relied upon by the applicant but not treated as necessary to decide the present application.

Interpretation and reasoning: The Authority construed Entry 69 by identifying two conjunctive factual conditions for exemption-(i) the service provider must be an NSDC-approved training partner, and (ii) the services must be provided "in relation to" a scheme implemented by NSDC. The Authority examined documentary evidence submitted by the applicant: (a) a certificate of approval from NSDC confirming applicant's status as an approved training partner, and (b) the agreement/term sheet evidencing engagement to execute the "Market led Fee-based Services" scheme implemented by NSDC, including obligations to upload candidate data to the Skill India Portal and performance monitoring by NSDC. The Authority found both statutory conditions satisfied on the material before it and concluded that the exemption applies.

Ratio vs. Obiter: Ratio - The Authority's binding conclusion is that when (1) an entity is an NSDC-approved training partner and (2) the services rendered are in relation to an NSDC-implemented scheme (as evidenced by agreement/approval), such services fall within Entry 69 and attract Nil rate. Obiter - The Authority's general observations regarding the pari materia nature of CGST and KGST Acts and the description of NSDC's scheme implementation mechanics are explanatory and not essential to the legal holding.

Conclusion: The services provided by the applicant under the "Market led Fee-based Services" scheme are exempt from GST; applicable rate is Nil under Entry 69 of Notification No. 12/2017-Central Tax (Rate).

Issue 2 - Whether the applicant satisfies the specific conditions for exemption under Entry 69 (proof and scope of "in relation to" requirement)

Legal framework: Entry 69 conditions are factually focused: approval status as NSDC training partner and a causal/relational nexus between the services rendered and a scheme implemented by NSDC. The notification does not elaborate further conditions or procedural formalities beyond these descriptive qualifications.

Precedent treatment: The applicant relied on a prior ruling for the proposition that being an approved training partner under the same NSDC scheme sufficed for exemption. The Authority did not need to distinguish or overrule precedent; it applied the statutory entry to the present facts.

Interpretation and reasoning: The Authority analyzed the documentary record to determine whether the applicant met both conditions. It accepted the NSDC certificate as proof of approval (satisfying condition (i)). It interpreted "in relation to" pragmatically - services are "in relation to" an NSDC scheme where the applicant is contractually engaged to execute the scheme's components (including uploading candidate data to the Skill India Portal and meeting training/certification targets), and where NSDC retains monitoring and termination rights tied to scheme performance. The Authority concluded that the contractual engagement and operational interlinking of services with NSDC's scheme demonstrate the requisite nexus.

Ratio vs. Obiter: Ratio - Documentary approval and demonstrable contractual/operational nexus to an NSDC-implemented scheme constitute sufficient proof that services are "in relation to" the scheme for purposes of Entry 69. Obiter - The Authority's description of NSDC's monitoring rights and termination for failure to meet targets served evidential rather than doctrinal purposes.

Conclusion: The applicant satisfied both conditions of Entry 69: (a) NSDC approval as a training partner (documentary certificate), and (b) provision of services demonstrably "in relation to" an NSDC-implemented scheme (agreement and scheme implementation mechanics). Therefore, the exemption applies.

Cross-references and ancillary points

1. The Authority treated the CGST Act and the KGST Act as pari materia and applied the same interpretive approach to both enactments; the ruling therefore addresses entitlement under both Central and State GST regimes insofar as the notification and facts are common.

2. The Authority limited its determination to the specific factual matrix and documentary evidence before it - approved training partner status and contractual engagement under the named NSDC scheme. The decision is fact-dependent and rests on satisfaction of the notification's conditions as demonstrated by the record.

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