2019 (7) TMI 42 - AAR - GST

Exemption from GST - activity of providing Skill development training in different sectors/courses under Uttar Pradesh Skill development Mission (UPSDM) to train the youth of Uttar Pradesh for gainful employment of the candidates. - HELD THAT - The intent of the legislature is to exempt services provided to the Central Government, State Government or Union Territory Administration under any training program for which total expenditure is borne by such Governments. In the instant case, though, we find that the service is being provided by the applicant to a Society namely Uttar Pradesh Skill Development Society. Although, we have been given to understand that the entire training program would be fully funded by Central and State Governments, but nothing has been brought on record to prove that UPSDC can be construed as Central or State Government. The exemption under Sr.No.72 of the Notification No.12/2017-CT(R) and parallel notification issued for State Tax exemption, shall be available only if the service is provided to the Central Government, State Government or Union Territory Administration under any training program for which total expenditure is borne by the Government. We thus hold that the said exemption shall not be applicable/available to the applicant.

Summary

Issues involved:
1. Applicability of exemption under Notification Number 12/2017-Central Tax (Rate) for the applicant.
2. Determination of whether services provided by the applicant fall under the mentioned notification.

Analysis:

Issue 1: Applicability of exemption under Notification Number 12/2017-Central Tax (Rate)
The applicant sought a ruling on whether the exemption provided under Serial Number 72 of Notification No.12/2017-Central Tax (Rate) issued by the Central Government and the corresponding notification by the Madhya Pradesh Government is applicable to them. The Authority examined the nature of services provided by the applicant, which involved skill development training under the Uttar Pradesh Skill Development Mission. The key consideration was whether the services qualified for exemption under the notification, which pertained to services provided to the Central or State Governments under training programs fully funded by them. The Authority noted that the applicant provided services to the Uttar Pradesh Skill Development Society, not a government entity, despite the funding arrangement. As the applicant failed to establish the society's status as a government body during the hearing, the Authority concluded that the exemption did not apply to the applicant.

Issue 2: Determination of services falling under Notification Number 12/2017-Central Tax (Rate)
The Authority analyzed the text of Serial Number 72 of Notification No.12/2017-Central Tax (Rate) to determine the scope of exemption provided. The notification exempted services provided to the Central or State Governments under training programs fully funded by them. The Authority emphasized that for the exemption to apply, the services must be directly provided to government entities. Despite the funding arrangement by the Central and State Governments for the training program, the Authority found that the applicant's services to the Uttar Pradesh Skill Development Society did not meet the criteria for exemption under the notification. Therefore, the Authority ruled that the applicant was not entitled to the benefit of the exemption under the mentioned notification for the training services provided to the Uttar Pradesh Skill Development Corporation.

In conclusion, the Authority held that the applicant was not eligible for the exemption under Notification Number 12/2017-Central Tax (Rate) for the services provided to the Uttar Pradesh Skill Development Corporation. This ruling remains valid unless declared void under the relevant provisions of the GST Act.