2021 (3) TMI 449 - AAR - GST

Requirement of registration - Tamil Nadu Skill development Corporation(TNSDC) - TNSDC is registered as a non-profit organization under Section 8 of the Companies act in the year 2013 by the Government of Tamil Nadu with an objective to provide Skill Training Programme for meeting the growing industrial demand for skilled workers - benefit of exemption under Sl. No. 69 8670 of Notification No.12/2017-C.T.(Rate) dated 28.06.2017 - HELD THAT - The entry at Sl.No.69 exempt services covered under specific Headings when provided by a specific class of persons in relation to specific programme/course/scheme and SI.No.70 exempts specific services provided by MSDE empanelled assessing bodies. In the case at hand the applicant is State Skill Development Corporation set up by the Government of Tamilnadu. The applicant is not an SSC approved by the NSDC; they are not assessment agency approved by SSC or NSDC; they are not a training partner approved by the NSDC or the SSC; they are not assessing body centrally empanelled by MSDE. Thus, in the instant case, the activities of the applicant are not satisfying the conditions provided in the SI.No. 69 Sl.No.70 of the Notification No. 12/2017 (CT) R dated 28.06.2017. Therefore, they are not eligible to available exemption as per SI. No. 69 of Notification 12/2017 (CT) R dated 28.06.2017. The applicant has stated that they are similar to the National Skill Development Corporation in as much as they are a not-for-profit corporation set up by the Government of Tamilnadu as a Nodal agency to provide demand based and Industry relevant skills to the unemployed youth to enhance their employability under State Skill Development Programme and Centre Skill Development Programme (in respect of Centrally Sponsored State Managed). It is their claim that they being similar in structure, role and activities to NSDC set up by GOI, the exemption available to GOI is to be extended to them. The words of the entry of the exemption Notification is very clear and unambiguous - In the case at hand, the applicant does not fall under the class of persons who are exempted vide SI.No. 69 70 above and therefore their activities are not exempted. Further, the applicant has referred the notification issued in west Bengal in support of their claim. This has been examined and found that the one notification issued by the west Bengal is pari-materia to the Notification 12/2017 C.T.- Rate dated 28.06.2017 and Notification No. PBSSD/GST-REG/2017/009/273 dated 18(11 September 2017 issued by Paschim aanga Society for Skill Development is specific for PBSSD, West Bengal. No such specific Notification is issued for the State of Tamilnadu. Therefore, the same do not have reference value in the case at hand. In the instant case the activities of TNSDC are Supply as per Section 7(1) and are not excluded under Section 7(2). Further by the definition of business, the intent of profit is not necessary for the activity. Also, only the subsidy granted by the Government, stands excluded from Consideration . Therefore, the supply undertaken by the applicant is liable to GST and subject to the monetary Turnover of the applicant, the applicant is liable to obtain GST Registration - the activities of the applicant are Supply under Section 7(1) of the GST Act and are not exempted under SI.No. 69 70 of the Notification No.12/2017-C.T.(Rate) dated 28.06.2017 and therefore, the applicant is required to be registered under the Act.

Summary

Issues Involved:
1. Whether the Tamil Nadu Skill Development Corporation (TNSDC) is required to be registered under the GST Act.
2. Whether TNSDC is exempt from GST under Sl. No. 69 and Sl. No. 70 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Requirement for GST Registration:
The primary question was whether TNSDC, an unregistered entity, is required to register under the GST Act. TNSDC is a non-profit organization registered under Section 8 of the Companies Act, 2013, by the Government of Tamil Nadu, aimed at providing skill training programs. They receive government grants for conducting these programs, which are disbursed to training providers and cover transportation costs for trainees. Despite being a non-profit entity, the Authority examined whether TNSDC’s activities fall under the definition of "business" as per Section 2(17) of the CGST Act, which includes any trade, commerce, or similar activities, regardless of pecuniary benefit. Additionally, the term "consideration" under Section 2(31) excludes only subsidies from the government. The activities of TNSDC are categorized as "Supply" under Section 7(1) of the GST Act and do not fall under the exclusions of Section 7(2). Thus, TNSDC’s activities are subject to GST, and they are required to register under the GST Act based on their turnover.

2. GST Exemption under Notification No. 12/2017-C.T.(Rate):
TNSDC claimed exemption from GST under Sl. No. 69 and Sl. No. 70 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017. The Authority examined these entries:

- Sl. No. 69: Exempts services classified under Heading 9992, 9983, or 9991 provided by specific entities (NSDC, Sector Skill Council, approved assessment agencies, or training partners) in relation to certain skill development programs.
- Sl. No. 70: Exempts services under Heading 9983, 9985, or 9992 provided by assessing bodies empanelled by the Ministry of Skill Development and Entrepreneurship for assessments under the Skill Development Initiative Scheme.

TNSDC argued that their structure and activities are similar to NSDC, and thus, they should be granted the same exemption. However, the Authority found that TNSDC does not fit into the specific categories of entities mentioned in Sl. No. 69 and Sl. No. 70. TNSDC is not an SSC approved by NSDC, an assessment agency approved by SSC or NSDC, a training partner approved by NSDC or SSC, nor an assessing body empanelled by MSDE. Therefore, TNSDC does not meet the criteria for exemption under these entries.

Additionally, TNSDC referred to a notification issued in West Bengal for a similar organization, which was found to be specific to that state and not applicable to Tamil Nadu.

Conclusion:
The Authority ruled that TNSDC’s activities are considered "Supply" under the GST Act and are not exempt under Sl. No. 69 and Sl. No. 70 of Notification No. 12/2017-C.T.(Rate). Consequently, TNSDC is required to register under the CGST/TNGST Act 2017.