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2019 (3) TMI 1577
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....8 (10) TMI 681 - AUTHORITY FOR ADVANCE 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 Int....
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....ification No. 12/2017-Central Tax (Rate) dated 28.06.2017. Relevant 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 eligib....
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....ed the 28th June 2017 would be still available if such educational courses are offered to corporate and business institutions? Q.6. 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....
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....me would cover only the actual schemes and programmes of skill development that are undertaken by the Government through its various ministries, departments, directorates, attached offices and 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 ....
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.... 1.6. Therefore, Appellant states that the in such case, the ARA has failed to understand that in absence if any conflict or difference of opinion, decision of ARA is not required. 2. The ARA has failed to understand 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.....
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....een explained in subsequent grounds of appeal in detail along with evidences. 2.7. Therefore, once it is established that NSDC is involved in the implementation activity of the training programmes/ educational courses, then exemption should be granted to Appellant. 2.8. Hence, Appellant 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 mandat....
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....thod adopted by NSDC in achieving this objective is by providing financial support to various private sector enterprises and also by acting as a catalyst to support private sector initiatives for skill development. The Finance Minister of India in his 2008-09 Budget Speech while announcing the formation of NSDC mentioned 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....
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....DC does not primarily engage into training directly. Further, NSDC does not have its own schemes or projects. It merely acts as an implementing agency for schemes framed by other bodies or supports financial/ technically and monitors private sector initiatives. 3.8. Therefore, Appellant state that the ARA has erred in concluding that only the schemes 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 int....
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....any other Scheme implemented by the National Skill Development Corporation. 4.5. From the historical provisions under the erstwhile law and the Budget Speech it is apparent that the intention of the law makers is to promote skill development for increasing skilled employee strength of India. Hence, granting exemption from payment of service tax under the erstwhile law for all skill development courses affiliated with NSDC 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 s....
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....- ALLAHABAD HIGH COURT and 76 Corpus JurisSecundum 621........ In this connection reference may be made to 76 Corpus JurisSecundum at pages 620 and 621 where it is stated that the term "relate"' is also defined as meaning to bring into association or connection with It has been clearly mentioned that "relating to" has been held to be equivalent to or synonymous with as to "concerning with" and "pertaining to". The expression "pertaining 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 r....
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....rst question arises is tax payable only on enrollment fee for the course or also on the selling price of apparatus? Now, there may be many cases where students either drop out from the course in between the semester or unable to pass the course. The second question here arises that is the tax payable on the enrollment fees where students did not complete the course? The phrase "in relation to" here has a wide connotation to tax all the collections which relate to the 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 d....
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....of Business Partner Agreement and the corresponding invoices raised by business partners are attached herewith. 5.7. Appellant state that the situations referred to all the above questions are connected with the skill development training program undertaken by Appellant. Therefore, all such situations are in relation to "National Skill Development Programme". 5.8. The phrase "in relation to" creates a connection between two otherwise dis-joint activities. In the example taken above, sale of apparatus 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 inte....
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....rovided any reasons for concluding that the scope of "National Skill Development Programme" is restricted to schemes, actions and deeds that are actually done or are mandated to be done by various ministries, Government departments or their attached offices. There is no substantive evidence provided for making such conclusions. Appellant state that ARA has made such observations on mere personal beliefs. Point d above: Considering brevity, Appellant state that it has been elucidated supra that the scope of exemption is wider 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 ....
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....ecision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant.' Advance ruling' is defined as a decision provided by the authority on an application by the appellant and there is nothing in the definition or the sections relating to advance ruling which suggests that advance ruling, once applied for, is only given when the jurisdictional officer 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)....
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.... in Sr. No. 69 of Notification 12/2017-central Tax. The observations of the AAR are as follow:- "We find that the applicant is further claiming in their application that NSDC has not announced explicitly any course program which would be considered as part of National Skill Development Program implemented by the NSDC. It is reiterated that at the time of hearing there were requested to confirm and obtain in writing from NSDC as to what are the programmes that are being undertaken by NSDC under National Skill Development Program and submit the same. However, nothing in this regard had been submitted by the appellant from NSDC" 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....
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....opment implemented by the Ministry are PMKVY, Sankalp, Udaan, STAR, Polytechnic Schemes. The benefits of the notification would be applicable only if the services are in relation to the above referred programmes which are implemented by NSDC. iii) National Skill Development Program works in two parts i) skill development program which is very vast in scope and all public, private and individual efforts at skill development undertaken throughout the country by everybody would be covered under it. However, the words I National Skill Development Program' is very limited in scope and the scope is restricted only to the efforts that are undertaken 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 wo....
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.... Skill Training, the Ministry of External Affairs in collaboration with the Ministry of Skill Development gives pre orientation training under the technical intern training program and the program offers training in Japan. It is conducted under MSDE and the NSDC is the implementing and monitoring agency for the program. 21. We do not find any submissions made by the appellant that they are approved training partners of the NSDC with regard to the above mentioned schemes. Therefore, we come to the conclusion that the contention of the appellant is with regard to the general mandate given to NSDC of skill development in the country and as NSDC also approves 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 separab....
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....cost. However, in the instant case, the students are charged fees for the courses and classification under the entry would mean that there would be exemption from CGST on the above fees. Therefore, there is a significant difference in the treatment, purpose, content between the twin mandates of NSDC. The exemption given in the entry is to give exemption to the schemes implemented through ministries when NSDC works as an agency under the specific schemes and not to the general initiatives taken by NSDC. 23. The appellant has produced a copy of the agreement between him and NSDC. It is seen from the terms of the agreement (2.1 of Part II of the agreement) that the 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 ag....