2018 (3) TMI 352 - AT - Service Tax

Coaching and Training Services - whether giving certificate to the students by the respondent s institute which enabled the said students function as Insurance Agents is taxable or otherwise? - Held that - Similar matter has been decided by this Bench in the case of Pasha Educational Training Inst. 2008 (12) TMI 80 - CESTAT, BANGALORE , where it was held that training imparted should be considered to be a vocational training. Once, it is held that the appellant imparts vocational training, then they would be entitled for the benefit of exemption Notification 9/2003 ST, dated 20.6.03 as amended - appeal dismissed - decided against Revenue.

Summary

Issues involved:
Taxability of coaching and training services provided by an institute awarding certificates recognized by the Insurance Regulatory Development Authority (IRDA) as enabling students to work as Insurance Agents.

Analysis:

1. Issue of Taxability:
The primary issue in this case revolves around whether the certificates awarded by the institute, which allow students to function as Insurance Agents and are recognized by IRDA, are subject to taxation. The Adjudicating Authority alleged that the institute's services fell under commercial coaching and training, leading to demands, interest, and penalties. However, the First Appellate Authority set aside the Orders-in-Original, ruling that the institute should not be taxed under the category of Commercial Coaching and Training Services.

2. Interpretation of Exemption Notifications:
The judgment delves into the interpretation of exemption notifications, specifically Notification No. 9/2003 and No. 10/2003. The Commissioner (Appeals) highlighted that the institute did not qualify for exemption under these notifications as the certificates issued were not considered degrees or diplomas. Additionally, the appellants were providing coaching in Insurance Business, collecting substantial fees from insurance companies, and were not issuing certificates like diplomas or degrees recognized by law.

3. Vocational Training Consideration:
A crucial aspect discussed is whether the training offered by the institute qualifies as vocational training. The judgment emphasizes that vocational training imparts skills enabling immediate employment or self-employment. Despite the requirement for IRDA examination post-training, the comprehensive nature of the training and recognition by IRDA indicate vocational training. Consequently, the institute was deemed entitled to the benefit of exemption under Notification 9/2003-S.T.

4. Precedent and Upholding of Orders:
The judgment refers to a previous decision by the same Bench on a similar issue, indicating consistency in rulings. As the institute's training was deemed vocational and met the criteria for exemption, the impugned orders were upheld, and the appeals were rejected. The decision was based on the institute's approval by IRDA, the comprehensive syllabus covering insurance topics, and the recognition for imparting training.

In conclusion, the judgment clarifies the taxability of coaching and training services, the interpretation of exemption notifications, the consideration of vocational training criteria, and the application of precedent in upholding the orders. The decision highlights the importance of recognizing the nature of training provided and its alignment with vocational training standards for tax implications.