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 Sector Skill Council (TSSC) under NCVET are exempt from GST under Sl. No. 69 of Notification 12/2017-Central Tax (Rate) from November 14, 2024 onward. The services qualify as NSQF-aligned vocational training under SAC 999294. However, optional value-added services including placement assistance, entrepreneurship courses, and proprietary certification offered independently of the core program remain taxable as they fall outside the NCVET-approved qualification package. The exemption applies strictly to services relating to NSQF-aligned qualifications with approved packages under the regulated framework.

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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.

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