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of <h1>Services to Karnataka Skill Development Corp under 'Kalike Jothege Kaushalya' not exempt under Notification 12/2017-Central Tax</h1> <h3>In Re: M/s. Ethnus Consultancy Services Pvt. Ltd,</h3> In Re: M/s. Ethnus Consultancy Services Pvt. Ltd, - TMI ISSUES: Whether exemption under entry No. 72 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017 applies to services provided under training programmes funded by Government entities.Whether income earned from implementing a skill development program under a State Government scheme constitutes a taxable supply of services under GST. RULINGS / HOLDINGS: Exemption under entry No. 72 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017 is not applicable where services are provided to an independent legal entity distinct from the Central Government, State Government, or Union territory administration, even if such entity is a government-owned corporation.Income earned from Karnataka Skill Development Corporation by implementing the skill development program 'Kalike Jothege Kaushalya' under the CMKKY scheme of the Government of Karnataka constitutes a taxable supply of services. RATIONALE: The Court applied the conditions stipulated in entry No. 72 of Notification 12/2017-Central Tax (Rate) dated 28.06.2017, which requires that: (a) services be provided to the Central Government, State Government, or Union territory administration; (b) services be in the form of training programmes; and (c) 75% or more of the total expenditure be borne by the Government entity.The Court found that the Applicant provided services to a government-owned corporation (Karnataka Skill Development Corporation), which is an independent legal entity distinct from the State Government, and therefore the first condition was not satisfied.Since the first condition was not met, the Court did not consider the remaining conditions and held that the exemption does not apply.The Court concluded that the services rendered to the government-owned corporation are subject to GST as taxable supply of services under the CGST Act, 2017 and the KGST Act, 2017, which are in pari materia.
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