TaxTMI 
TaxTMI 
2021 (8) TMI 1017
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...., we would like to make it clear that the provisions of both the COST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT The submissions made by the applicant are as under:- 2.1 Yashaswi Academy for Skills, the applicant/YAS, is registered as a 'not for Profit Company' under sec. 25 of the Companies Act 1956. Applicant 's activities are Charitable and they hold registration under Sec I 2AA of Income Tax Act 1961. Third party aggregator under Apprentices Act 1961: 2.2 Applicant is registered as Third Party aggregator under the Apprentice Act 1961. Applicant provides support for mobilizing the trainees under National Apprenticeship promotion Scheme for providing them on-the-job practical training in industries. For that purpose Applicant enters into agreements with various companies/organizations (calle....
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....ustry partners. As per agreement industry partner is under obligation to pay stipend to trainees and also to provide uniform and safety shoes and insure the trainee students. YAS is acting as agent on behalf of industry partner as far as providing stipend, insurance premium, uniform and safety shoes is concerned 2.10 Rule 33 of CGST Act is as follows: Notwithstanding anything contained in the provisions of this Chapter, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of supply, if all the following conditions are satisfied, namely,- (i) The supplier acts as a pure agent of the recipient of the supply, when he makes the payment to the third party on authorization by such recipient; (ii) The payment made by the pure agent on behalf of the recipient of supply has been separately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) The supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account Explanation. - For the purposes of this ru....
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....all over India. Technical education was all theory and without practical experience if was of no use. The Apprentice Act provided obligations on industries to impart practical training to qualified unemployed. The employment exchanges were not able to cope up with the work load and hence it became necessary to outsource the work. However, there was apprehension of exploitation in the hands of private sector operators. Hence regulations were made to formulate the boundaries within in which such agents have to work. Now let us consider the issue under consideration. Agreement made as agent appointed under Apprentice Act. 2.17.1 The Apprentice Act 1961 is a Central legislation to regulate and control training of apprentices and matters connected thereto. The qualification as trainees and criteria as employer and the duties and obligations of trainees and employer are provided in the Act. The trainees and industries are spread all over India. To bring them together the government approves organizations having expertise in this field. Such organization is required to get itself empaneled. The Ministry of Skill Development and Entrepreneurship has selected the Applicant to do this ....
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....gregator on which applicant has charged GST. 2.20. The Applicant therefore contents that he acts as pure agent for transfer of funds from industrial establishment to the trainees, by way of reimbursement. In these transactions the Applicant does not get any consideration from the trainees, and hence the amount received as reimbursement of stipend is not taxable under CGST/SGST Act. 2.21 The applicant does not wish to press other two points/question nos 2 and 3, on which advance ruling is sought, namely: amount received towards insurance premium and amount received for uniform and safety shoes. 03. CONTENTION - AS PER THE CONCERNED OFFICER: The submissions made by the jurisdictional officer are as under:- Clarification /comments on the queries raised by the applicant are as under: 3.1 As per the nature of work / activities described and submission made, it appears that the applicant is acting as a pure agent on behalf of industry partner for the provision of services of selecting trainees, preparing stipend statement and disbursing stipend, taking out insurance policies, procuring uniform and safety shoes. The applicant, in the said application, has declared / subm....
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....iform and safety shoes and the applicant will be the recipient of supply of goods. Hence, the applicant is just a channel for the payment of the goods procured. Therefore, the reimbursement of actual amount incurred for procurement of uniform and safety shoes, by the industry partner to the applicant is not taxable in the hands of the applicant. 04. HEARING 4.1 Preliminary hearing in the matter was held on 28.01.2020. Shri G. Y. Patwardhan, Advocate and Authorized Representative, appeared, and requested for admission of the application. Jurisdictional Officer was absent. 4.2 The application was admitted. Final hearing in the matter was fixed on 27.07.2021. Shri G. Y. Patwardhan, Advocate, and Authorized Representative, appeared and made oral and written submissions. Jurisdictional Officer was absent. 4.3 Heard the matter. 05. DISCUSSIONS AND FINDINGS: 5.1 We have gone through the facts of the case, documents on record, oral and written submissions made by the applicant as well as the written submissions made by the jurisdictional officer. 5.2 The applicant withdrew Question nos. 2 and 3 during their oral submissions made on 27.07.201 and have further confirmed ....
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....provided by the trainers to the trainees as the trainer is liable to make payment of the consideration. This consideration is paid through the applicant and the applicant is not allowed to make any deductions in that amount. Hence, the applicant is only a conduit for the payment and the actual service is by the trainers to the trainees. Therefore, the reimbursement by the industry partner to the applicant of the stipend paid to students is not taxable in the hands of the applicant. 5.7 We find that, the applicant, is empanelled with the Ministry of Skill Development and Entrepreneurship, as a "Third Party aggregator" for mobilizing the trainees under National Apprenticeship Promotion Scheme (NAPS) for providing them on-the-job practical training in various industries, for which they enter into agreements with various companies/ organizations (called as industry partner) who impart actual practical training to the students. The applicant, in lieu of agreements with the industry partners, is engaged in preparing monthly attendance record of the apprentices, getting it certified from the Company ; processing stipends of the apprentices ; making payment of stipend to the apprentices....