TaxTMI 
TaxTMI 
2023 (6) TMI 1228
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....aircraft type ratings on their existing licenses would be covered under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 and Si. No. 66 (a) of the Notification No. A.NI-2-843/X1-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017, and thereby, exempted from levy of Central Goods and Service Tax & Uttar Pradesh Goods and Service Tax." 3. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against the applicant. The applicant has submitted that- 3.1 Applicant is a group company of Inter Globe Enterprises Private Limited ("hereinafter referred to as Inter Globe"), which is engaged in the business of facilitating the training of commercial pilots on the Aircraft Simulators installed at its training facilities. Such training is provided in accordance with the training curriculum approved by the Directorate General of Civil Aviation (hereinafter referred to as "DGCA") for obtaining the extension of aircraft type ratings (hereinafter referred to as "ATRs") on their existing licenses. 3.2 Under Section 5(2)(g....
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....r to extend such aircraft rating, the pilot has to make an application to the DGCA for an endorsement in respect of their license. 3.9 For making an application for the extension of ATR, the following documents need to be submitted by the applicant: a. Duly certified logbook of the applicant. b. Duly certified training progress statement. c. Duly certified ATR skill test report. d. Duly certified Form CA-39, for the preceding six months and for the preceding 12 months, each. 3.10 Thus, the training provided for the extension of ATR can be undertaken only at training organisations approved by the DGCA, and the documents referred to above have to be issued by such an organisation and the pilots holding the Commercial Pilot License (CPL(A)) have to mandatorily undergo the ATR training for the specific type of aircraft(s) that they will be flying with any commercial airlines, i.e. the pilots cannot fly for any commercial airlines unless they hold the ATR for particular aircrafts that such airlines fly in the ordinary course of business. 3.11 In order to standardize and streamline the process, Civil Aviation Requirement (hereinafter referred ....
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....No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017 (hereinafter referred to as 'Notification No. 12/2017') and Sl. No. 66 (a) of the Notification No. A.NI.-2-843/XI-9(47)/ 17- U.P. Act-1-2017-Order- (10) -2017 dated 30.6.2017 (hereinafter referred to as 'Notification dated 30.6.2017'), and thereby, exempted from levy of Central Goods and Service Tax & Uttar Pradesh Goods and Service Tax (hereinafter collectively referred to as 'GST'). APPLICABLE PROVISIONS OF THE CGST ACT Levy of GST 4.2 Section 9(1) of the CGST Act is the charging section levying Central Goods and Service tax (for short 'Central tax' or 'CGST') on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under Section 15 of the CGST Act. 4.3 The term 'supply' has been given meaning under Section 7 of the CGST Act to include - a. all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business. b. import of services fo....
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....er: 30 Heading 9992 Education services. 9 - 4.9 The relevant entry of the Notification No. 12/2017 and the Explanation in that regard have been extracted below: 66 Heading 9992 or Heading 9963 Services provided - (a) by an educational institution to its students, faculty and staff Nil Nil "2. Definitions. - For the purposes of this notification, unless the context otherwise requires, - .... (y) "educational institution" means an institution providing services by way of- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course;" 4.10 The corresponding exemption notification under UPGST is Notification dated 30.6.2017. The relevant entry of the Notification dated 30.6.2017 and the Explanation in that regard have been extracted below: 66 Heading 9992 or Heading 9963 Services provided - (a) by an educational institution to its students, faculty and staff ....
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....GST dated 1.1.2019 (hereinafter referred to as "Circular dated 1.1.2019"), where it has been clarified that all the services provided by an educational institution to its students are considered to be exempt under the said entry. Relevant portion of the Circular dated 1.1.2019 is reproduced hereunder: 2.1 Supply of all services by an educational institution to its students, faculty and staff is exempt under Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017, Sl. No. 66. 4.17 The Applicant, in the present case, submits that the Applicant qualifies as an educational institution who is supplying services to its trainees (students), and therefore, the supplies made by it would be covered under Sl. No. 66 (a) of Notification No. 12/2017. 4.18 It is submitted that educational institutions have been defined under clause (y) to Notification No. 12/2017 to mean institutions providing services by way of: a. pre-school education and education up to higher secondary school or equivalent; b. education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; and c. education as a part of an appr....
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....ffice or function. c) the Black's Law Dictionary (Sixth Ed.) defines "qualification" as the "possession by an individual of the qualities, properties, or circumstances, natural or adventitious, which are inherently or legally necessary to render him eligible to fill an office or to perform public duty or office". 4.27 From the dictionary meaning of "qualification" above, it is clear that in the legal parlance, qualifications do not refer to the mere possession of degrees, diplomas, etc., but the possession of skills, accomplishments, etc. which have been acquired through training or academic education, and which confer upon a person the ability to undertake a particular profession or pursuit. 4.28 It is submitted that, in the present case, the qualification being referred to is the completion of the training programme provided by the Applicant, where the competency required for applying for an ATR extension in the pilot's license in terms of Schedule II to the Aircraft Rules is acquired, thereby leading the trainees to become qualified to appear for the examination conducted by the DGCA and apply for the said ATR extension, and get employed as pilots in the commercia....
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....the rating provided on their license, and every category of license dealt with under Schedule II of the Aircraft Rules includes this provision as well. 4.35 In terms of Rule 133B read with sub-sections 4 and 5 of Section J of Schedule II to the Aircraft Rules, it is submitted that a CPL(A) specifies the rating of the types of aircraft that the pilot is entitled to fly, and in order to add such additional ATRs to the license, they would have to undergo a training in respect of such an additional aircraft at an ATO providing type rating training, as approved by the DGCA for this purpose, and make an application for the extension of the ATR in their CPL(A). 4.36 In pursuance of the above provisions, read in conjunction with Rule 133A of the Aircraft Rules, reference is made to the CAR Section 7, Series D, Part IV dated 15.03.2015 ("ATO CAR"), which deals with ATOs set up for type rating of flight crew. Relevant provisions of ATO CAR are reiterated hereunder: 2. GENERAL REQUIREMENTS 2.1 The approval of a training organization by DGCA shall be dependent upon the applicant demonstrating compliance with the requirements of this CAR. 2.2 Approved training f....
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.... will have to maintain detailed trainee records to show that all the requirements of completion of the training programme, as prescribed by the DGCA, have been met by the trainees. e. The DGCA also maintains an effective supervision over the ATO in order to ensure its continuing compliance with the approval requirements. 4.38 Reference can also be made to the CAR Section 7, Series B, Part I, dealing with the eligibility criteria for examination for the issue/extension of licenses/ratings, which provides that such an applicant may be required to undergo Ground Training Classes on the aircraft from a DGCA approved training institute in case they are seeking an ATR extension in respect of an aeroplane having AUW more than 5,700 kgs, such as an Airbus A320 or a Boeing 737NG. 4.39 In this regard, it is submitted that the ATR training can be undertaken by a pilot either independently through an ATO, or in the course of employment with a scheduled operator/commercial airline, wherein the operator/airlines send their pilots to a ATO for undertaking such training programmes. 4.40 In order to examine the nature of the training services vis-à-vis its taxability, refer....
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....ed by the Act and the Rules aforesaid and the instructions/regulations issued thereunder from time to time. 16. An analysis of the counter affidavit of the DGCA as set-out hereinabove would show that, (i) an institute as the petitioner cannot be set-up without the approval of the DGCA; (ii) detailed requirements for approval have been made out in CAR Section 2, Series "E" Part VII; (iii) such approval is given only after the institution satisfies DGCA that it has the facilities, equipments, training aids, faculty, library and other infrastructure for providing such training and follows the syllabus prescribed by the DGCA to be coached/trained/imparted in the said institute; (iv) the approval is not a onetime approval but has to be obtained year after year and at the time of each renewal DGCA has to be satisfied of existence of the compliances/parameters; (v) the institutes are obligated under para 8.4 of CAR to issue Course Completion Certificates to the students who have successfully passed the examination and completed the requisite On Job Training; (vi) that the format of the said Certificate is also approved by the ....
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...., as on 19.11.2020, and therefore the stay on the said decision of the Delhi High Court can be considered to have been effectively vacated. 4.50 Reliance is placed on the decision in the case of Institute of Aeronautics and Engineering v. CCE, Bhopal, 2018 (10) G.S. T.L. 267 (Tri. - Del.), wherein it has been held that merely because the decision of the Delhi High Court has been stayed does not mean it has been wiped from existence; the ratio is still available, and it can be referred to in subsequent cases. 4.51 This decision has been followed by various High Courts in the case of Commissioner of Customs & Central Excise v. MP Flying Club Ltd., 2014 (8) TMI 1182 - MADHYA PRADESH HIGH COURT, and in the case of Commissioner of Central Excise, Customs & Service Tax v. Gang Aviations Ltd., 2014 (35) S.T.R. 441 (All.). 4.52 In the latter case, the appellant was providing both flying training and AME training, and the Allahabad High Court has followed the reasoning in Indian Institute of Aircraft Engineering (supra) and held that such training services would not be leviable to Service Tax. 4.53 The decision in Indian Institute of Aircraft Engineering (supra) has also been fo....
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....s of Training, Certification and Watch-keeping for Seafarers) Rules, 2014, and taking into consideration the decision of the Delhi High Court in the case of in Indian Institute of Aircraft Engineering (supra), it has been clarified that such courses are exempt from GST. 4.58 From perusal of the said discussion in the 37th GST Council Meeting, it can be inferred that the intention of the GST Council is to exempt the training course since the course and the completion of the same under the MTIs are recognised by the law. By the same analogy, the said exemption should be applicable on the training programmes conducted by the ATOs approved by the DGCA for similar training purposes, like in the case of the Applicant. 4.59 In light of the above jurisprudence, it is submitted that the training provided by Applicant is the education imparted under the course approved by the DGCA, and hence, the successful completion of the ATR training programme is a qualification recognised by the law. 4.60 Thus, second condition is also satisfied in the present case. 4.61 From the above discussion, it can be seen that the requirements discussed for a ATO to qualify as an educational instituti....
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....(a) of the Notification No. 12/2017, thereby making such supply of services exempt under GST law. 4.68 At the cost of repetition, the Applicant submits that all the conditions of Sl. No. 66 (a) of Notification No. 12/2017 and Sl. No. 66 (a) of the Notification dated 30.6.2017 are satisfied, as tabulated below: SI. No. Condition Whether satisfied 1. Applicant should be providing education as a part of a curriculum. Yes, as explained above. 2. The curriculum should be for obtaining a qualification recognised by any existing law. Yes, as explained above. 4.69 In view of the above, it is submitted that the supply of ATR training to commercial pilots in accordance with the training curriculum approved by the DGCA for obtaining the extension of aircraft type ratings on their existing licenses, would be covered under Si. No. 66 (a) of the Notification No. 12/2017 and Si. No. 66 (a) of the state Notification dated 30.6.2017 and thereby, exempted from levy of GST. 5. As per declaration given by the applicant in Form ARA-01, the issue raised by the applicant is neither pending nor decided in any proceedings under any of the provisions of the Act, against t....
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....ated 28.06.2017, as amended, reads as under- In exercise of the powers conferred by sub-section (1) of section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub section (1) of section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in column (5) of the said Table, namely:- Table Sl.No. Chapter, Section, (per Heading, cent.) Group or Service Code (Tariff) Description of Services Rate Condition (1) (2) (3) (4) (5) Heading 9992 Services provided - (a) by an educational institution to its students, faculty and staff (aa) by an educational institution by way of conduct of entrance examination against conside....
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....al education course."; 13. As such, there is no restriction of 'upto higher secondary level' in respect of exemption covered in entry 66(b)(iv) of the Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017. 14. As per para 2(y) of the notification no 12/2017-Central Tax (Rate) dated 28.06.2017, educational institution means an institution providing services by way of (i) pre-education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force; (iii) education as a part of an approved vocational education course,. 15. Services Accounting Codes (SAC Codes) 999294 is used for the Other education and training services n.e.c. (Not elsewhere classified) under Goods and Service Tax classification. SAC (Services Accounting Code) are used for the identification of the service. This service comes under heading Education services. As per SI. No. 30 of the Notification No. 11/2017-Central Tax (Rate) dated 28.6.2017, the Educational services classifiable under HSN No. 9992 are taxable at 18% GST rate. Sl. No. Chapter, Section....
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....tion means an institution providing services by way of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force. We would like to discuss the term "qualification". As per the University Grants Commission Act 1956 as amended up to 20th December, 1985, the term "qualification" means a degree or any other qualification awarded by a University. In this case, services provided by M/s CAE Simulation Training Private Limited does not qualify the "qualification" as required under the provisions of University Grants Commission Act 1956 and other similar education regulatory bodies in India. In our view, extension of aircraft type ratings on existing licenses of pilots is not any new qualification or degree, it is only upgradation of skill in specific field. As regards supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses is not mentioned in the said notification, the same are not exempted. 16.3 The applicant, during the course of....
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.... seek the job of flying an aircraft for which he has undergone Type Rating Training unless an endorsement to that effect is made in the licence of the CPL holder by the DGCA. It is the endorsement which makes him eligible to obtain employment with Airlines to fly the aircrafts for which he has been type rated and not the fact of having completed the training with the institute. 17. As such, we are of the view that the supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses is not exempted under Si. No. 66 (a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.6.2017. 18. In view of the above discussions, we, both the members pass the following ruling- RULING 19. Question- "Whether the supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses would be covered under SI. No. 66 (a) of the Notification No.....
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....ers and Maintenance Engineers and publication entitled Civil Aviation Requirements, issue special directions not inconsistent with the Aircraft Act, 1934 (22 of 1934) or these rules, relating to the operation, use, possession, maintenance or navigation of aircraft flying in or over India or of aircraft registered in India. 4. 418. Approved Training Organisation. (1) A Flying Training Organisation (hereinafter referred to as FTO) providing training on aircraft below 5700 kgs all-up-weight shall obtain the approval of the Director-General before the students are enrolled to acquire flying experience and the level of competency required for obtaining a licence or rating specified in rule 38 and Schedule II of these rules. 5. 1338. Approved Organisations- (1) (a) In this part 'organisation' refers to an organisation or a person engaged in one or more of the following activities, namely :- (i) design and manufacture of aircraft, aircraft components and items of equipment including materials, forging, castings, standard parts; (ii) maintenance, overhaul, modification, repair, inspection, treatment, processing of aeronautical products and continuing airworthiness ma....