9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 1285 - AAR - GSTLevy of GST - valuation - reimbursed amount of Stipend received from Industry Partner to be distributed to the trainees at actuals - pure agent service - HELD THAT - Section 2 (5) of the CGST Act, 2017, defines the term Agent as a person including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another - It is found that the Applicant is registered as a facilitator under the National Employability Enhancement Mission ( NEEM Scheme ). The details of the NEEM Scheme are mentioned in the subject application and are therefore not reproduced again. The Applicant has submitted that, as a NEEM Facilitator, they are responsible to enroll NEEM trainees ( trainees ) and provide them with on job practical training through various Institutes, Factories, etc. ( Industry Partners ) to enhance the prospects of their employability. The applicant would enter into Agreements to enroll NEEM trainees ( trainees ) and provide them with on job practical training through the said Industry Partners. Applicant selects trainees for imparting practical training to them to coordinate between the trainees and the said Industry Partners for the proper implementation of scheme of training envisaged under the Apprentice Act 1961 and for such purpose, enters into a written agreement with the Industry Partners, for identifying and providing relevant eligible trainees to the Industry Partners, for which a fixed administrative fee per trainee per month will be charged from such Industry Partners and on which the applicant accepts that GST is payable. Regarding the issue in respect of stipend paid to the trainees by the applicant, it has been submitted by the applicant that the concerned Industry Partners will provide training to the trainees and are required to pay stipend to the trainees as per the NEEM Regulations. Even though, it is seen that the services will be provided by the trainees to the Industry Partners, for which stipend is mandated to be paid to the trainees by the Industry Partners, this stipend is not directly paid to the trainees by the said Industry Partners but will be routed through the applicant as per the NEEM Regulations. The entire amounts received as stipend from the Industry Partners will be paid to the trainees without any amount being retained. Thus, the applicant is only acting as an intermediary in collecting the stipend from the Industry Partners and then disbursing the same to the trainees in full without making any deductions from the stipend before disbursement to the trainees. The amount of stipend received by the applicant from the Industry Partners and paid in full to the trainees is not taxable at the hands of the applicant. Hence, in view of the submissions made by the applicant and also in agreement with the observations made by the jurisdictional officer, it is held that the stipend paid by the Industry Partners to the applicant to be further paid to the trainees in full does not attract GST and is not required to be added to the taxable value. In a similar case of IN RE M/S. YASHASWI ACADEMY FOR SKILLS 2021 (8) TMI 1018 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA this Authority has held that the reimbursement by Industry Partner to the applicant, of the stipend paid to the trainees, does not attract tax under the GST Act - In the case of Yashaswi Academy for Skills, the Applicant Companies were registered as agents under National Employability Enhancement Mission (NEEM) of the Government of India and acted as a facilitator for extending support for mobilizing the trainees under NEEM Scheme of Government of India as per regulations, under notification issued by All India Council for Technical Education (AICTE), for providing on-the-job practical training in industries to trainees to enhance their future employability, and for which they entered into agreements with various companies/ organizations (called as industry partners) to impart actual practical training to the students. In the said case also, the applicants, in addition to taxable amounts received from its Industry Partners for services rendered, also received Stipends amounts (payable by the Industry Partners to the Trainees) which was paid in full to the trainees. Since the matters in the Yashaswi Academy case as case decided by this authority is very similar to the facts of the subject case, there are no reason to deviate from our ruling given in the said case, which are also applicable in the subject case. GST is not leviable in the instant case.
Issues Involved:
1. Applicability of GST on the reimbursement received by the applicant from the industry partner for the stipend paid to students. Issue-wise Detailed Analysis: 1. Applicability of GST on the Reimbursement of Stipend: Facts and Contentions by the Applicant: - The applicant, a NEEM facilitator, is registered under the Indian Trust Act, 1882, and the Income-tax Act, 1961, as a not-for-profit organization. It is also registered under the GST Act. - The NEEM scheme aims to enhance the employability of graduates/diploma holders by providing on-the-job practical training through industry partners. - The applicant enters into agreements with industry partners to provide trainees for practical training, during which the trainees receive a monthly stipend. - The applicant processes and disburses the stipend to trainees on behalf of the industry partners and receives reimbursement for the same. - The applicant contends that it acts as a "Pure Agent" under Rule 33 of the CGST Rules, 2017, and thus the stipend reimbursement should be excluded from the value of supply and not attract GST. Applicant's Interpretation of Law: - Section 9 of the CGST Act, 2017, levies GST on the value determined under Section 15 of the CGST Act. - The applicant argues that it fulfills the conditions of a "Pure Agent" as per Rule 33, which includes: - Entering into a contractual agreement to act as an agent. - Not holding any title to the goods or services procured. - Not using the goods or services for its own interest. - Receiving only the actual amount incurred without any profit. - The applicant cites similar rulings in the cases of Yashaswi Academy for Skills and Cadmaxx Solutions Education Trust, where it was held that such reimbursements do not attract GST. Contentions by the Concerned Officer: - The officer agrees that the applicant fulfills the conditions of a "Pure Agent" under Rule 33. - The officer notes that the applicant acts as an intermediary, collecting and disbursing the stipend without any profit. - The officer concludes that the stipend reimbursement should be excluded from the value of supply and not attract GST. Observations and Findings: - The applicant is a NEEM facilitator responsible for enrolling trainees and providing them with practical training through industry partners. - The applicant charges an administrative fee for its services, which is subject to GST. - The stipend paid to trainees by the industry partners is routed through the applicant, who disburses it in full without any deductions. - The applicant acts as a conduit for the stipend payment, and the actual service is provided by the trainees to the industry partners. - The reimbursement of the stipend does not form part of the taxable value of supply and does not attract GST. Order: - The reimbursement received by the applicant from the industry partner for the stipend paid to students does not attract GST. Conclusion: - The Authority for Advance Ruling (AAR) ruled that the reimbursement of the stipend paid to trainees by the industry partners through the applicant does not attract GST, as the applicant acts as a "Pure Agent" and the stipend amount is excluded from the value of supply.
|
