2022 (4) TMI 1398 - AAR - GST

Levy of GST - Valuation - reimbursement amount received by the Applicant from Trainer - Stipend and other expenses incurred by the Applicant in accordance with AICTE (NEEM) Regulations to ensure wealth safety and health of NEEM Trainees - pure agent services or not - includible in the value of taxable supply made by the Applicant to Trainer for the purpose of payment of Goods and Service Tax or not - HELD THAT - It is clear that the whereas Agreement mandated the applicant as responsible for the purpose of payment of stipend or other required contributions in respect of the NEEM Trainees statement of Work attached (Sr. No. 4 of the Other Terms and Conditions ) to the said Agreement mentions payment of reimbursement the actual cost of uniform safety shoes etc. provided to NEEM Trainees - there appears to be some contradictions between clause 4 of the Agreement where the applicant is held responsible for payment of stipend or other required contributions and from a reading of the Statement of Work (Annexure B- Sr. Sr. No. 4 of the Other Terms and Conditions ) it appears that the client (not known whether it applies to IEIPL) is required to reimburse the actual cost of uniform safety shoes etc. provided to NEEM Trainees. Both the Agreements attached by the applicant as Specimen Copies in respect of the subject application do not provide a clear picture of the actual facts in respect of the present matter and therefore the questions raised cannot be answered due to incomplete and inconclusive documentation submitted by the applicant in respect of the subject application.

Summary

Issues Involved:
1. Whether the reimbursement amount received by the Applicant from Trainer towards "Stipend and other expenses incurred by the Applicant in accordance with AICTE (NEEM) Regulations to ensure wealth, safety, and health of NEEM Trainees" is in the capacity of pure agent and hence not includible in the value of taxable supply made by the Applicant to Trainer for the purpose of payment of GST?

Detailed Analysis:

1. Facts and Contention - As Per The Applicant:

1.1 Applicant's Background:
CLR Skills Training Foundation, the Applicant, is a Not-for-Profit Company registered under Section 8 of the Companies Act, 2013, and also registered under the CGST Act, 2017.

1.2 NEEM Scheme:
The National Employability Enhancement Mission (NEEM) is a program launched by the Ministry of Human Resource Development, Govt. of India, through the All India Council for Technical Education (AICTE), aimed at offering on-the-job practical training to enhance employability.

1.3 Role of NEEM Facilitator:
The Applicant, as a NEEM Facilitator, engages with candidates (NEEM Trainees) and facilitates their training in companies/industries registered as NEEM Trainers. The Applicant is responsible for various administrative tasks, including executing agreements with NEEM Trainees and ensuring their welfare, safety, and health.

1.4 Reimbursement and Pure Agent Concept:
The Applicant contends that the reimbursement amount received from the Trainer towards "Stipend and other expenses incurred by the Applicant in accordance with AICTE (NEEM) Regulations" should be considered in the capacity of a pure agent and hence not includible in the value of taxable supply for GST purposes.

1.5 Supporting Arguments:
The Applicant argues that it qualifies as a pure agent under Rule 33 of the CGST Rules, 2017, and cites various Advance Rulings and Tribunal decisions to support its contention.

2. Observations and Findings:

2.1 Examination of Agreements:
The Applicant submitted two specimen agreements:
- Training Collaboration Agreement with LG Electronics India Private Limited (LGEIPL)
- Training Services Agreement with Interplex Electronics India Pvt. Ltd. (IEIPL)

2.2 Issues with LGEIPL Agreement:
The Training Collaboration Agreement with LGEIPL was found to be unsigned and expired before the application date, making it invalid and non-maintainable for the present ruling.

2.3 Issues with IEIPL Agreement:
The Training Services Agreement with IEIPL was signed but contained inconsistencies between the clauses and the Statement of Work, particularly regarding the responsibility for payment of stipends and other contributions.

2.4 Incomplete Documentation:
Due to the incomplete and inconclusive documentation submitted by the Applicant, the Authority could not ascertain the actual facts and therefore could not answer the questions raised.

3. Order:

3.1 Conclusion:
The Authority for Advance Ruling concluded that due to the incomplete and inconclusive documentation, it could not answer the question of whether the reimbursement amount received by the Applicant from the Trainer towards "Stipend and other expenses incurred by the Applicant in accordance with AICTE (NEEM) Regulations" is in the capacity of a pure agent and hence not includible in the value of taxable supply for GST purposes.

3.2 Final Decision:
The question was not answered due to the reasons discussed in the body of the order.