AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1577
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....RULING, MAHARASHTRA. BRIEF FACTS OF THE CASE A. IMS Proschool Pvt Ltd. (herein after referred to as 'Appellant') is a company incorporated under the Companies Act, 1956 having its registered office at Mumbai, Maharashtra. B. The Appellant is an initiative of IMS Learning Resources and offers educational training and skilling courses through classroom training and virtual coaching, in many areas such as data science, digital marketing, IFRS, ACCA, Fitter - Mechanical Assembly, Basic Electrical, Sales Person Retail etc. across many cities in India including Mumbai, Pune, Chennai, Bangalore, Delhi, Hyderabad, Gurgaon, Kochi and several districts of Gujarat. C. The Appellant has obtained registration under Goods and Service Tax (hereinafter referred to as 'GST') regime in states of Maharashtra, Haryana, New Delhi, Karnataka, Kerala, Tamil Nadu, Telangana and Gujarat. D. Appellant is engaged in the business of skilling the youth with the objective of helping them find decent job, make them employable and to help them earn better living. This includes preparing graduates and working professionals to appear for various National and International certifications for career development ....
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....levant to current context, Appellant would like to reproduce Entry No. 69 in the said notification as under: Any services provided by, (a) the National Skill Development Corporation set up by the Government of India; (b) a Sector Skill Council approved by the National Skill Development Corporation; (c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; (d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to- (i) the National Skill Development Programme implemented by the National Skill Development Corporation; or (ii) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (iii) any other Scheme implemented by the National Skill Development Corporation. K. Appellant believed that the activities performed in relation to the courses approved by National Skill Development Corporation is eligible for exemption under the above entry. However, there were certain doubts with respect to eligibility of exemption in following situations: a. The said courses are offered to corporate and business institutio....
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....Whether the NSDC approved educational courses which are actually imparted by the business partners of the Applicant, on behalf of the Applicant as sub-contractor of Applicant, at various centres located across the country, will be considered as offered by the Applicant? Q.7. If answer to Q.6 is Yes, whether benefit of GST exemption as per Notification No. 12/2017- Central Tax (Rate), dated the 28th June 2017 would be available to the Applicant? M. The concerned jurisdictional officer had submitted contention against the ruling sought by Appellant. The said submissions against each of the above questions are summarized in the following table: Q.No. Questions by Appellant Submission by concerned officer 1. Whether educational courses offered by the Applicant which have been approved by NSDC would be construed as in relation to National Skill Development Programme implemented by NSDC? Yes. As the applicant is engaged in the business of skilling the youth with the objective of helping them find decent job make them employable and to help them earn better living. It fulfills the norms of the NSDC. 2. The Applicant offers certain educational courses for which qualification stan....
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....d organizations and cannot, in any way, be construed to be including each and every way under the sun which enhances skills in one way or other. Hence, the ARA answered all the questions in negative. P. Being aggrieved by the said Order, Appellant has preferred the present Appeal on the following grounds. Grounds of Appeal 1. The ARA has failed to understand that in absence of conflict, decision may not be necessary. 1.1. Appellant states that the decision of ARA is required only when there is a question with respective of possibility of a prospective conflict. The very purpose of creating an ARA under the Statute is to avoid the germination of a future conflict and obtain clarity with respect to levy of tax on a particular transaction in advance. Hence, in a way Advance Ruling is intended to reduce litigation where there is a likelihood of conflict or difference of opinion/ view between the tax payer and the tax officer. 1.2. In this context Appellant would like to refer to the definition of "advance ruling" in clause (a) of Section 95 of Central Goods and Services Tax Act, 2017 as under: "advance ruling" means a decision provided by the Authority or the Appellate Authority ....
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....erstand that the exemption under Notification 12/2017Central Tax (Rate) is comprehensive 2.1. On page 24 of the impugned Order, following findings have been made: a. We find that the main schemes that would be covered under National Skill Development Programme would be - Pradhan Mantri Kausha/ Vikas Yojana (PMKVY), Sankalp, Udaan, Star, Polytechnic schemes, Vocationalization of education, run by the Ministry of Skill Development and Entrepreneurship and similar other skill development schemes that may be, and are, run under, or by, various other ministries or departments, their attached or subordinate offices or institutions. b. If the services in relation to the schemes, as mentioned in the above paragraph, are provided through the partner approved by NSDC, then only, the benefit of Notification, as claimed, would be applicable to the Appellant and it would not be applicable in respect of other services, relating to skill development, provided by the applicant. 2.2. Appellant states that the ARA has erred in drawing such conclusions and has incorrectly narrowed the scope of the exemption sought. Appellant would like to reproduce the exemption entry no. 69 under Notification No....
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....ppellant states that the ARA has failed to understand that the scope of the exemption Notification No. 12/2017-Central Tax (Rate) is comprehensive to grant exemption in this case. 3. Notwithstanding to other grounds of appeal, the ARA has failed to understand the scope of exemption provided for "National Skill Development Programme" 3.1. It is important to understand the scope of sub-clause (i), i.e. "services in relation to National Skill Development Programme". At this juncture, Appellant refers to operating method of NSDC which is also available on www.nsdcindia.org as under: a. The objective of NSDC is to contribute significantly to the overall target of skilling up of people in India, mainly by fostering private sector initiatives in skill development programmes and to provide funding. b. NSDC provides funding to build scalable and profitable vocational training initiatives. Its mandate is also to enable support system, which focuses on quality assurance, information systems, and train the trainer academies, either directly or through partnerships. c. NSDC acts as a catalyst in skill development by providing funding to enterprises, companies and organizations that provide....
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.... that "There is a compelling need to launch a world-class skill development programme in a mission mode....... 3.3. At this juncture, it is pertinent to refer pages 36 to 39 of NSDC Annual Update 2014-15, the relevant extract of which is being reproduced as under: Programme Development The Programme Development (PD) team is responsible for building a robust pipeline of proposals that create large scale, sustainable skilling capacity on the ground across the country. All proposals have to adhere to the NSDC proposal evaluation process both financial and social..... The submitted proposals undergo an initial screening process where the proposalis vetted and discussed by the members of the PD team. Proposals that pass the initial screening are submitted for further diligence conducted by the investing and incentivizing team at NSDC. 3.4. The above Annual Update document is available on NSDC website as well. Hence, it is clearly understandable that National Skill Development Programme is a methodology adopted by NSDC to achieve the objective of skilling youth and increasing skilled employability in India. Hence, again referring to the aforementioned Annual Update 2014-15, if the f....
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....as mentioned supra qualify as "National Skill Development Programme". Instead this, programme" has to be understood to be the method of approving the training partner and the project undertaken by the training partner. If the project is approved by NSDC then it qualifies to be in relation to "National Skill Development Programme" 4. The ARA has failed to understand the intention of legislature to give benefit to entities involved in skill development 4.1. Appellant state that the intention of the legislature has to be given utmost importance while determining the eligibility of any exemption. In the case of Doypack Systems (Pvt) Ltd vs. Uol [1988 (36) E.LT. 201 (S.C.)] =1988 (2) TMI 61 - SUPREME COURT OF INDIA, the Apex court has made the following unequivocal observation: '57. It has to be reiterated that the object of interpretation of a statute is to discover the intention of the Parliament as expressed in the Act. The dominant purpose in construing a statute is to ascertain the intention of the legislature as expressed in the statute, considering it as a whole and in its context. That intention, and therefore the meaning of the statute, is primarily to be sought in the words....
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....DC supplements this intention of the Government of India. 4.6. It is not disputed that Appellant is an approved training partner of NSDC and is seeking exemption on educational courses/ projects which are approved by NSDC. Appellant is engaged in the business of skilling of youth with the objective of helping them find decent job, make them employable and to help them earn better living. This includes preparing graduates and working professionals to appear for various National and international certifications for career development needs. 4.7. Appellant would also like to refer some sample copies of term sheets which are approved by NSDC and the same have been annexed with the appeal submission. These term sheets depict the targeted number of trainees, the sector in which the trainees can work, the course duration, the target training segment, etc. Hence, these make the fact apparent that Appellant is working with NSDC to achieve the objective of skill development in India. 4.8. Once it is obvious that the law makers intend to give exemption, denial of substantial benefit based on erroneous interpretation would defeat the objective of law makers. Therefore, Appellant state that ....
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.... to" is an expression of expansion and not of contraction.' 5.3. Further, in the case of CCE vs. Solaris Chemtech Limited [2007 (214) ELT 481 (SC)] = 2007 (7) TMI 2 - SUPREME COURT OF INDIA, the Apex Court again observed that: '8..........It is for this reason that this Court has repeatedly held that the expression "in relation to" must be given a wide connotation. The Explanation to Rule 57A shows an inclusive definition of the word "inputs". Therefore, that is a dichotomy between inputs used in the manufacture of the final product and inputs used in relation to the manufacture of final products. The Department gave a narrow meaning to the word "used" in Rule 57A. The Department would have been right in saying that the input must be raw-material consumed in the manufacture of final product, however, in the present case, as stated above, the expression "used" in Rule 57A uses the words "in relation to the manufacture of final products". The words "in relation to" which find place in Section 2(f) of the said Act has been interpreted by this Court to cover processes generating intermediate products and it is in this context that it has been repeatedly held by this Court that if man....
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.... course, directly or indirectly. Since apparatus is indirectly used in completing the course, it has a connection with the course. Once this connection is established then all such connected (directly or indirectly) activities become taxable. 5.6. Drawing inference from the above, Appellant state that once exemption is given all the activities as mentioned in Q2, Q3, Q5 and Q6 above become exempt. The following table explains how these activities are connected with the training activity for skilling the youth:  Q.No. Questions by Appellant Explanation establishing connection 2 The Applicant offers certain educational courses for which qualification standards / framework i.e. QP/ NOS has not been defined by NSDC and will be approved by NSDC as and when the relevant QP/ NOS would be defined by NSDC. In the interim period, NSDC has given exceptional approval on such courses. Till the time QP/ NOS are defined for such educational courses and are eventually approved by NSDC, whether such courses will be treated as in relation to National Skill Development Programme implemented by NSDC? Such exceptional approved educational courses are aimed to develop the skills of the candi....
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....atus is a distinct activity. In absence of the phrase "in relation to", only the designated course becomes exempt even though the apparatus is used for studying the course. The presence of the phrase "in relation to" exempts the sale of apparatus also. 5.9. It is a settled principle of rule of interpretation that the Court cannot read any words which are not mentioned in the Section nor can substitute any words in place of those mentioned in the section and at the same time cannot ignore the words mentioned in the section. Equally well settled rule of interpretation is that if the language of statute is plain, simple, clear and unambiguous, then the words of statute have to be interpreted by giving them their natural meaning as observed in Smita Subhash Sawant vs. Jagdeshwari Jagdish Amin [AIR 2016 S.C. 1409 at 1416] = 2015 (9) TMI 1648 - SUPREME COURT OF INDIA. 5.10. Hence, utmost importance has to be given to the phrase "in relation to" which enlarges the scope of exemption. Appellant state that the Ld. ARA has erred in narrowing the scope of exemption and denying the exemption for the aforementioned situations. 6. The ARA has passed the Order based on presumptions and assumpt....
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....because of the use of the phrase "in relation to". Here again, such conclusion is made on mere beliefs without any legal explanations for the same. 6.3. Appellant state that the Order cannot be passed on assumptions and presumptions without providing reasons. In this context Appellant refer to the Instruction F. No.390/CESTAT/24/2016-JC issued by Central Board of Excise and Customs on 13.04.2016 referring to the decision of Commissioner of Customs (Import) vs. Do Best Infoway [2016-TlOL-604-CESTAT-MAD] = 2016 (3) TMI 222 - CESTAT CHENNAI as under: '5.0 It is a settled principle in law, that: a. Justice has not only to be done but seem to have been done in the performance of quasi-judicial functions. b. If the law prescribes a manner of performance of a function, then that manner is only manner for performance of the same and every other manner is mandatorily barred by law. c. Thus if the quasi judicial authority has to grant the personal hearing on the date and time decided by him while deciding the case, then that authority alone can grant the said personal hearing on that date and time. The record of such hearing should be essential part of the record of the case under th....
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....ficer doesn't agree with the contention of the appellant. If such was the intention of the Legislature, then it would have specifically provided for the same. Therefore, we do not agree with the contention of the appellant. 11. We have also gone through the Advance Ruling Order passed by the AAR. Question No. 1 referred to by the appellant is as follows:- The AAR have held all the questions put forth in the advance ruling in the negative. The notification under consideration in the said case is as follows: Entry No. 69 in the said notification as under: Any services provided by,- (e) the National Skill Development Corporation set up by the Government of India; (f) a Sector Skill Council approved by the National Skill Development Corporation; (g) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; (h) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to (iv) the National Skill Development Programme implemented by the National Skill Development Corporation; or (v) a vocational skill development course under the National Skill Certification and Monetar....
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....15. The appellant in the grounds of appeal has mainly emphasized on coverage under (i) and (iii) of Entry No 69. Under (ii) services in relation to a vocational course under the National Skill Certification and Monetary Reward Scheme sr exempted. It is seen that the entire submission is focused on Sr.No. (i) and (iii) and they have not given any documentary evidences which would justify any claim that the program implemented by them is covered by (ii) of the Notification. Therefore, we will examine the claim of the appellant with regard to Sr. No (i) and (iii) of the notification. 16. IMS Proschool Pvt. Ltd. i.e. the appellant in the present case offers educational training and skill courses through classroom training and virtual coaching in many areas such as Data Analysis, Digital Marketing, Fitter, Mechanical Assembly, Electrician Courses, Sales Courses etc. They also prepare programs which includes preparing crews and working professionals to appear for various national and international certification including Financial Modelling, Financial Analysis, Management Account, Business Analysis etc. The appellant has claimed that they have tie up with various Government Organization....
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....through government funding, government schemes and specifically designed government programmes. iv) The intention of NSDC are in the nature of engaging and supporting private sector in skill development which is also one of its mandate and function. Apart from this, it is also the implementing agency for various schemes such as PMKVY, Sankalp, Udaan, STAR, Polytechnic Schemes. If the intent of the legislature had been to extend the benefit of exemption in respect of all activities in relation to skill development done by NSDC then the wordings of the Notification would not have been restricted. National Skill Development Program would cover only the actual schemes and programmes of skill development that are undertaken by the government through its various ministries, departments, directorate and cannot be construed to include each and every activity under the sun. 20. We agree with the order of the AAR. It is true that the appellant is a training partner approved by the NSDC. It is also true that NSDC has a mandate to promote skill development by catalysing the creation of large quality private vocational institutions and also to create a network of strong institutions which wou....
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....proves courses and funds private sector initiative of which the appellant is one, and therefore it is the contention of the appellant that they are covered by the Entry No.69 of the Notification 12/2017. It seems to be the contention that the term 'in relation to' which occurs in Entry No.69 is a broad term and even programmes or courses conducted by private sector schools which are approved and funded by the NSDC would be covered by the Entry. Let us now have a look at the other initiatives of the NSDC which are different and separable from the actual programmes implemented by it. It is submitted by the appellant in their grounds of appeal that the NSDC plays three key roles. 1) Funding and Incentivizing: This involves providing finance either as loan or equity or providing grants and financial incentives to select private sector initiatives. The exact nature of funding i.e. equity loan and grant will depend on the viability and attractiveness of the scheme. 2) Enabling Support Services: A Skill Development Institute requires the number of inputs or support services such as Curriculum Facility, Training Standards, Quality Assurance, Technology Platform, Student Placement Mechan....
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....e appellant 'undertakes to comply with the guidelines as mandated by NSDC'. Clause 2.1 (v) states that NSDC will terminate the agreement if the project is not implemented as per the Project Proposal. The Project proposal is defined as the proposal submitted by the appellant mentioning the cost, benefits and shown in Schedule IV. The Project Proposal just outlines the cost and benefits of the proposal. The tenor of the agreement shows that the project, milestones all should be as per the NSDC guidelines. Nowhere does the agreement mention that the project proposal is as per any NSDC programme or any NSDC scheme. The agreement also shows that the Trainees are charged fees based on the programme enrolled into and this all shows that the impugned activity of the appellant falls under the general mandate of NSDC of skill development and has nothing to do with any programme implemented of NSDC. 24. The annual report of NSDC for the year 2017-18 says the following :- ....."The Company is the implementation agency for key skill development schemes like Pradhan Mantri Kaushal Vikas Yojna (PMKVY), Pradhan Mantri Kaushal Kendra (PMKK), Pravasi Kaushal Vikas Yojana (PKVY), UDAAN, Capacity Bu....