9911796707
TMI Blog2022 (6) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... ions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS AND CONTENTION - AS PER THE APPLICANT 2.1 This Applicant, M/s Patle Eduskills Foundation, registered under the GST Laws is engaged in the business of Human Resource & Skill Development and is a facilitator under the National Employability Enhancement Mission ('NEEM Scheme') of the Govt, of India. 2.2 The primary objective of the NEEM Scheme, notified through the All India Council of Technical Education ('AICTE'), is to generate skilled labour by making provision for facilitating "on job practical training" to trainees to enhance employability of a person. The Scheme is available to persons either pursuing Post Graduation/Graduation/ Diploma in any technical or non- technical stream or somebody who has discontinued studies after class 10. 2.3 As a NEEM Facilitator, the Applicant is responsible to enroll NEEM trainees ('trainees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Nehru Medical College, Sawangi, a constituent College of Datta Meghe Institute of Medical Sciences (Deemed to be University) having its Registered Office at Wardha; 2.6 As per the Agreement, Applicant identifies & provides to Trainer Institutes, relevant trainees who can work at the said organizations & obtain "on job practical training" so as to enhance their chances of employability and for which, the Applicant charges a fixed fee of Rs. 1500/- per trainee per month from such Institutes on which GST is levied and paid. 2.7 Further in terms of the Agreement, the Trainer Institutes are also required to pay monthly stipend to the trainees for the duration of their training. The method of paying stipend is fixed in a manner where the Trainer Institutes pay the stipend amount to the Applicant who in turn disburses it to the trainees. 2.8 To substantiate the same, the Applicant has submitted sample agreements on record. It is clarified that agreements with all Trainer Institutes are similar in nature and contains similar clauses. The key clauses of the Agreements can be listed as under:- - Payment: Monthly stipend shall be paid to trainees by Trainer Institute; however, such pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST. 2.11 The Applicant refers to the following advance rulings to contend that the stipend amount recovered without any profit element should be excluded from the value of its service:- (i) Ruling given by the Authority for Advance Ruling under GST in Maharashtra in case of DRS MARINE SERVICES PVT. LTD. 2019 (20) G.S.T.L. 471 (A.A.R. - GST). (ii) Ruling of the Karnataka Authority of Advance Ruling in the matter of Arivu Educational Consultants Pvt Ltd. 2020(32) G.S.T.L. 353 (A.A.R. - GST. Kar.) (iii) Decision given by the Karnataka Advance Ruling Authority in the matter of Asiatic Clinical Research Pvt Ltd. 2020(33) G.S.T.L. 42 (A.A.R.- GST Kar.) (iv) Decision of the Karnataka Advance Ruling Authority made in the case of Cadmaxx Solutions Education Trust 2020(32) G.S.T.L. 49 (A.A.R. - GST- Kar.) 2.12 The applicant has also submitted that stipend amount is not attributable for services provided by it. As per Sections 9 & 15 of the CGST Act, value for a taxable supply is the transaction value which is the price actually paid or payable for the supply of services and which should include: any amount that the supplier is liable to pay but is borne by recipient, Incidental exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mployer transaction. Such transactions are kept out of the purview of the GST by virtue of Schedule III of the CGST Act. In the instant case, even though trainees do not hold any employee-employer relationship with Applicant or Trainer Institute, the nature of amounts paid to trainees is nothing but a remuneration for their work and should not be chargeable to GST. 2.16 Hence, applicant, as a registered facilitator under NEEM Regulations, qualifies to be a 'Pure Agent' while collecting the reimbursement of Stipend amount and hence such stipend should not form part of taxable value of supply. 03. CONTENTION - AS PER THE CONCERNED OFFICER: Officer's Submission dated 11.02.2022 - 3.1 Section 2 (5) of the GST Act, 2017, defines an Agent and the criteria for Pure Agent has been stipulated in Rule 33 of MGST Rules 2017 and the applicant satisfies all the conditions mentioned therein as under:- (i) The trainer institutes verifies/certifies attendance prepared by applicant & acknowledges copy of invoices submitted by the Foundation. Thus, there is authorization by the recipient which satisfies the first condition. (ii) invoices submitted by the applicant shows that supp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant specifically mention the stipend amount stating that "the amount is being collected as Pure Agent" and service charges are separately charged. 3.6 The applicant has fulfilled conditions (a) to (d) in the explanation to Rule 33 which has defined Pure agent, and therefore it may be concluded that the applicant is a Pure Agent and is acting as a pure agent so far as receiving reimbursement of stipend amounts from the various Trainer institutes and remitting the same to the trainees is concerned. Q2. If not, whether such stipend amount forms a part of the taxable supply? 3.7 Section 15 of MGST Act 2017 deals with determining taxable value of supply in regular normal trade, where the invoice value is the taxable value of supply. However, to determine value of supply of certain specific transactions, specific rules (Rules 27 to 35 of MGST Act, 2017) have been prescribed. Taxable value of supply in case of the applicant who is acting as a pure agent (as interpreted in answer to question 1) is determined in accordance with rule 33. 3.8 As per Rule 33, the expenditure or costs incurred by a supplier as a pure agent of the recipient of supply shall be excluded from the value of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation and are therefore not reproduced again. 5.4 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. ('Trainer Institutes') to enhance the prospects of their employability. The applicant has mentioned a list of Entities with whom they have entered into Agreements to enroll NEEM trainees ('trainees') and provide them with on job practical training through the said Entities. The applicant has specially mentioned names of seven entities in Para G of their submissions and therefore the discussions and findings in the subject order are restricted to the said Entities only. 5.5 The applicant selects trainees for imparting practical training to the trainees and to coordinate between the trainees and the said Entities 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 Entities/Trainer Institutes and the applicant, for identifying and providing relevant eligible trainees to the Trainer Institutes, charges a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to state that "the amount is being collected as Pure Agent under Rule 33 of the CGST Act". 5.9 The impugned Agreements also mention that the selection of trainees under the Contract does not constitute an Employment Contract either with the Applicant or with the trainee and the Trainer Institutes have no obligation to offer employment to the trainees in future. 5.10 The applicant has submitted that the stipend cost is recovered from the Trainer Institutes and the entire amount so recovered is paid to the trainees without any retention from the said amount of stipend, and therefore the stipend paid should be excluded from value of supply and hence the applicant will not be liable to discharge any GST on the stipend amount Received for payment to the trainees. The applicant has cited some case laws in support of there contention and has stated that the stipend amount received by them for onward payment is not attributable for services provided by the applicant. 5.11 We find that the applicant, as a NEEM facilitator, is identifying and providing/enrolling trainees to the Trainer Institutes for which they charge a fixed fee of Rs. 1500/- per trainee per month on which they also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the trainees, does not attract tax under the GST Act". 5.13.2 In the Yashaswi case also, the Applicant Company was registered as an Agent under National Employment Enhancement Mission ('NEEM') of the Government of India and acted as a facilitator or 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 the applicant 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 applicant 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. 5.13.3 Since the matter in the Yashaswi Academy case decided by this authority is very similar to the facts of the subject case, we have no reason to deviate from our ruling given in the said case which is also applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
