2025 (7) TMI 1184 - AAR - GST

Training services for handheld device repair by TSSC-accredited institutions exempt from GST under Notification 12/2017

AAR Kerala ruled that training services for repair and maintenance of handheld electronic devices provided by an institution accredited with Telecom ... Exemption from GST - training services - applicability of SI. No. 69 of N/N. 12/2017-Central Tax (Rate) dated 28.06.2017 - institution accredited vide the Memorandum of Understanding with Telecom Sector Skill Council (TSSC) dated 14th November, 2024 - Applicable SAC - HELD THAT:- The training services provided by the applicant from 14th November 2024 onward are covered under the revised exemption provisions of Sl. No. 69 of N/N. 12/2017, as amended. The training focuses on the repair and maintenance of handheld electronic devices, is part of a formal vocational education program, and is duly recognized and regulated by NCVET. It is also submitted that the optional value added services offered by the applicant such as placement assistance, a short duration entrepreneurship course, and the proprietary certification titled 'Britco Certified Digital Professional (BCDP)' are not part of the NSQF aligned qualification package approved by NCVET and are not delivered under the aegis of the Telecom Sector Skill Council (TSSC). These services are offered independently of the core vocational training program and are availed by students at their discretion for additional fees. Accordingly, these services do not qualify for exemption under SI. No. 69 of Notification No. 12/2017-Central Tax (Rate), as amended, and shall continue to be taxable under GST. The benefit of exemption under the said notification is strictly limited to services that are in relation to an NSQF aligned qualification with an approved qualification package. Applicable SAC - HELD THAT:- It is seen that the applicant is providing training service to its students with respect to training for repair and maintenance of handheld devices such as mobile phones and tablets. This is basically training services falling under 9992 (Education Services) and specifically under 999294 (Other education and training services n.e.c). As per the Explanatory Notes to the Scheme of Classification of Services, SAC 999293 pertains to 'Commercial training and coaching services' and includes training or coaching provided by any institute or establishment for imparting skills or knowledge on any subject or field (other than sports), typically offered on a commercial basis, with or without issuance of a certificate, including coaching or tutorial classes. However, the services provided by the applicant do not fall within the scope of generic commercial coaching. The applicant delivers structured vocational training aligned with the National Skill Qualification Framework (NSQF) and under a qualification package approved by the National Council for Vocational Education and Training (NCVET) through a recognized Awarding Body, the Telecom Sector Skill Council (TSSC). These training services are formally accredited, nationally recognized, and intended for skill development under a regulated framework, rather than generic commercial coaching. Therefore, the appropriate classification is SAC 999294 - Other education and training services n.e.c., which includes skill development and vocational training services not specifically covered elsewhere. The applicant, being an institution accredited vide the Memorandum of Understanding with Telecom Sector Skill Council (TSSC) dated 14th November, 2024, as a training partner with the TSSC recognized by the National Council for Vocational Education and Training (NCVET) and providing training service to its students with respect to training for repair and maintenance of handheld devices such as mobile phones and tablets, which is in relation to a qualification aligned with the National Skill Qualification Framework (NSQF) in respect of which the National Council for Vocational Education and Training (NCVET) has approved a qualification package, is exempted from GST on such training service with effect from 14th November, 2024 as per SI. No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended as on date - The applicable SAC is 999294 - 'Other education and training services nowhere else classified.' ISSUES: Whether training services provided by an institution accredited as a training partner with an awarding body recognized by the National Council for Vocational Education and Training (NCVET), aligned with the National Skill Qualification Framework (NSQF) and approved qualification package, are exempt from GST under Serial No. 69 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended.Determination of the correct Service Accounting Code (SAC) applicable to such training services-whether it is 999293 ('Commercial training and coaching services') or 999294 ('Other education and training services n.e.c.').Whether optional value-added services such as placement assistance, entrepreneurship courses, and proprietary certifications offered outside the NSQF aligned qualification package qualify for GST exemption under the said notification. RULINGS / HOLDINGS: Training services provided by a training body accredited with an awarding body recognized by NCVET, in relation to an NSQF aligned qualification with an NCVET approved qualification package, are exempt from GST under Serial No. 69 of Notification No. 12/2017-Central Tax (Rate), as amended, with effect from the date of accreditation (14th November 2024). The exemption applies as the services 'qualify for exemption under the GST Notification' due to compliance with the revised scope introduced by Notification No. 08/2024-Central Tax (Rate) dated 10.10.2024.The applicable SAC for such training services is 999294 - 'Other education and training services n.e.c.' and not 999293 - 'Commercial training and coaching services,' because the services constitute structured vocational training aligned with NSQF and regulated by NCVET, rather than generic commercial coaching.Optional value-added services such as placement assistance, short entrepreneurship courses, and proprietary certifications that are not part of the NSQF aligned qualification package and not provided under the aegis of the recognized awarding body do not qualify for GST exemption under Serial No. 69 and remain taxable. RATIONALE: The legal framework applied includes the Central Goods and Services Tax Act, 2017 (CGST Act), Kerala State Goods and Services Tax Act, 2017 (KSGST Act), and Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended by Notification No. 08/2024-Central Tax (Rate) dated 10.10.2024 and Notification No. 06/2025-Central Tax (Rate) dated 16.01.2025.The Court recognized that the amendment to Serial No. 69 broadened the exemption scope from scheme-based to standards-based, focusing on training bodies accredited by awarding bodies recognized by NCVET and delivering NSQF aligned qualifications with approved qualification packages.The Court emphasized that the applicant's training services satisfy these conditions by virtue of the Memorandum of Understanding with the Telecom Sector Skill Council (TSSC), an NCVET recognized awarding body, and the NSQF Level 4 qualification approved by NCVET.The distinction between vocational training under a regulated national framework and generic commercial coaching was pivotal in classifying the correct SAC code, with the Court relying on the Explanatory Notes to the Scheme of Classification of Services.The Court clarified that exemption is strictly limited to services related to NSQF aligned qualifications with approved qualification packages, excluding ancillary or optional services not covered under the recognized framework.