TaxTMI 
TaxTMI 
2022 (6) TMI 1285
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.... 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 FACTS: 2.1 2COMS Foundation, (the applicant/NEEM Facilitator) is registered as Trust under the Indian Trust Act, 1882 & also registered under sec. 12AA of Income-tax Act, 1961 as not for profit organization with GSTIN: 27AAATZ.2088B1ZG. Applicant Trust is also registered as Agent under National Employability Enhancement Mission (hereinafter for the sake of brevity referred as 'NEEM') as a NEEM Facilitator under NEEM ID : 1-4241562511. 2.2 NEEM is a Central Government initiative for enhancing the employability of the graduate/diploma holder in any technical/non-technical stream. To organize the activity methodically, the Central Government has formulated NEEM Regulations. Organizations having expertise in this field are required to get itself registered as NEEM agent (facilitator) with All India Council for Technical Education (AICTE). NEEM Agent's job is to select traine....
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....nees. Thus, the Invoice primarily to comprise the details of Administrative Charges (leviable to GST) and Reimbursement Amount. 2.7 Applicant seeks Advance Ruling on applicability of GST on Re-imbursed amount i.e. Stipend received from Industry Partner to be distributed to the trainees at actuals. B. STATEMENT CONTAINING APPLICANT'S INTERPRETATION OF LAW 2.8 Section 9 of the CGST Act, 2017 envisages levy of GST on the value determined under Section 15 of the CGST Act & Section 15 of the said Act envisages that such value shall be determined in such manner as may be prescribed. 2.9 The applicant is of the opinion that it acts as Pure Agent as far as payment of Stipend and collection by mode of reimbursement of Stipend is concerned and as a Pure Agent in the subject transaction satisfies all the conditions mentioned in Rule 33 of Chapter IV of CGST Rules, 2017, tabulated as under:- For the purposes of this rule, the expression pure agent means a person who- Applicant Remarks (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; Applica....
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....k done by Trainee is industry Partner and not the applicant. The Applicant simple acts as Pure Agent of Industry Partner by paying the stipend and receiving the stipend by mode of reimbursement by an exact amount without keeping any load or gap or profit on the same. (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 The Applicant proposes to issue Invoice stating clearly the bifurcation of the amount of Stipend being claimed as re-imbursement and amount being charged as Administrative Charges. (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. The Applicant shall be charging Administrative Charges for the services being rendered which will be in addition of the Stipend claim. 2.11 The Opinion of the Applicant is squarely substantiated with the Advance Ruling in case of Yashaswi Academy for Skills issued vide Order No. GST-ARA-84/2019-20/B-48 dated 20.08.2021. The extract of the decision of AAR with very si....
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....Invoicing) 03. CONTENTION - AS PER THE CONCERNED OFFICER: Officer Submission dated 15.06.2022:- 3.1 The applicant, M/s 2COMS Foundation is enrolled as a facilitator under National Employability Enhancement Mission (NEEM), a scheme was notified by Government of India through the All India Council of Technical Education (AICTE) in July 2017 whose primary objective is to generate skilled labour by making provisions to facilitate "on job practical training" to trainees to enhance employability of a person. As a NEEM Facilitator, the applicant is responsible to enroll NEEM trainees ("the trainees") and provide them with on job practical training through industrial partners to enhance the prospects of their employability. 3.2 An agent as defined under section 2 (5) of the CGST Act, 2017 is different from the concept of a pure agent in the sense that latter is the one who while making a supply to the recipient, also receives and incurs expenditure on some other supply on behalf of the recipient and claims reimbursement (as actual, without adding it to the value of his own supply) for such supplies from the recipient of the main supply & indicates the same in the invoice separa....
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....e Applicant, imparts them "On Job Practical Training" in compliance with NEEM Regulations, 2017 which are notified by Government of India through All India Council of Technical Education (AICTE). Thus, other than administrative charges levied for services provided, the applicant also collects stipend to be paid to trainees. In terms of NEEM Regulations, the Trainer institutes are required to pay monthly stipend to the trainees for the duration of their training. The method of paying stipend is fixed in a manner where the industrial partners pay the stipend amount to the Applicant who in turn without deducting any amount disburses it to the trainees. Here the services provided by the Third Party (i.e. Trainee) to the recipient (i.e. industrial partners) is in the nature of work but there is no Employee-Employer Relationship between them. This is in addition to the services supplied by the Applicant on its own account i.e. identification, supply and management of trainees. Thus, the third condition is satisfied. 3.6 Above discussion leads to conclusion that the applicant has fulfilled all the three mandatory conditions which are required to be fulfilled by the Pure Agent, being a ....
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....id by the Applicant to the trainees without any deductions. 3.7.4 Finally, a Pure Agent : (d) Receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account. In the instant case, the Stipend paid by the applicant to trainees are re-imbursed by the Industry Partner in exact match of the amount paid. In other words no profit is made during reimbursement of the amount. It is envisaged that a separate Administrative Charges are Charged by the Applicant for providing services of processing of Stipend amounts. 3.7.5 Since applicant has fulfilled conditions (a) to (d) in the explanation to Rule 33 which has denied Pure Agent, it may be concluded that the applicant is a Pure Agent. Thus the applicant is acting as a pure agent so far as receiving reimbursement of stipend amounts from the various Trainer Institutes and remitting the same to the trainees is concerned. 3.8 As per Rule 33 of the CGST Rules, 2017, 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 conditions mentioned in explanation to ....
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....e Applicant is registered as a facilitator under the National Employability Enhancement Mission ('NEEM Scheme'). The details of the NEEM Scheme are mentioned in the subject application and are therefore not reproduced again. The Applicant has submitted that, as a NEEM Facilitator, they are responsible to enroll NEEM trainees (`trainees') and provide them with on job practical training through various Institutes, Factories, etc. ('Industry Partners') to enhance the prospects of their employability. The applicant would enter into Agreements to enroll NEEM trainees ('trainees') and provide them with on job practical training through the said Industry Partners. 5.5 Applicant selects trainees for imparting practical training to them & to coordinate between the trainees and the said Industry Partners for the proper implementation of scheme of training envisaged under the Apprentice Act 1961 and for such purpose, enters into a written agreement with the Industry Partners, for identifying and providing relevant eligible trainees to the Industry Partners, for which a fixed administrative fee per trainee per month will be charged from such Industry Partners and on which the applicant acce....
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....t, it has been submitted by the applicant that the concerned Industry Partners will provide training to the trainees and are required to pay stipend to the trainees as per the NEEM Regulations. Even though, it is seen that the services will be provided by the trainees to the Industry Partners, for which stipend is mandated to be paid to the trainees by the Industry Partners, this stipend is not directly paid to the trainees by the said Industry Partners but will be routed through the applicant as per the NEEM Regulations. The entire amounts received as stipend from the Industry Partners will be paid to the trainees without any amount being retained. Thus, the applicant is only acting as an intermediary in collecting the stipend from the Industry Partners and then disbursing the same to the trainees in full without making any deductions from the stipend before disbursement to the trainees. The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the Industry Partners against which stipend is payable. The amount of stipend received by the applicant from the Industry Partners and paid in full to the trainees is not taxable at the....