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TMI Blog2025 (3) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... in the invoice issued to the recipient of supply; the supplies procured are in addition to the supplies on his own account. No supplies are procured by the supplier (applicant) in the instant case, as the supplier just acts as a conduit in receiving the stipend amount from the industry partner, and disbursing the same to the trainees. Further, no payment is made to any third party, as no supply is procured by the applicant and only disbursal of funds (stipend) takes place. Accordingly, we find that the conditions as in clauses (i) and (iii) to Rule 33 of the CGST Act, 2017, do not get fulfilled in the instant case. Apart from the above, the amount or value that is eligible for exclusion from the taxable value under the 'pure agent' concept, prima facie, has to be an 'expenditure' or 'cost', which was incurred by the supplier as a pure agent of the recipient of supply. This is not so in the instant case of the applicant, because they have neither incurred any expenditure / cost on their own account, nor they have made payment to any third party, in this regard. Sale of Uniforms and shoes and the amount of Insurance Premium to industry partner - HELD THAT:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (hereinafter referred to as the 'Act') are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. Logskim Solutions Private Limited, located at II Floor, Old No 28/New No 45, Roop Emerald, North Usman Road, T Nagar, Chennai - 600017 (hereinafter called as 'the Applicant') are registered under the GST Acts with GSTIN 33AADCL6619E1ZQ. The applicant is a Third-party Aggregator for mobilizing, engaging and manning the trainees by entering into agreement with various industry partners that may or may not be registered with National Apprenticeship Promotion Scheme (NAPS) and National Apprenticeship Training Scheme (NATS). Industry partner imparts practical training or provide on-job training at their establishment. While the applicant is paid with the serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the personal hearing on 03.01.2025. The AR explained in brief about the activity being done by the applicant with regard to provision of supply of services and reiterated the submissions made by them while filing the application for Advance Ruling. The AR stated that the applicant is a third-party aggregator with National Skill Development Corporation (NSDC) and registered as a third-party aggregator with Board Apprenticeship Training (BOAT) and Ministry of Education to implement National Apprenticeship Training Scheme (NATS). AR explained that the applicant is mobilizing, engaging and manning the trainees, entering into agreement with various industry partners who provide practical training or provided on-job training at their establishment. 4.2 The AR further explained that while the applicant is paid with the service charges from the industrial partners, they also incur expenses such as provision of uniforms and shoes, insurance, processing of payment of stipend to apprentices through Apprenticeship portal gateway etc. AR informed that the amount of stipend to the apprentices/trainees are fixed by the industry partner, and the amount of minimum stipend to be paid is fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication issued under the provisions of this Act; (c) determination of time and value of supply of goods or services or both; (d) admissibility of input tax credit of tax paid or deemed to have been paid; (e) determination of the liability to pay tax on any goods or services or both; (f) whether applicant is required to be registered; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term." From the above, it could be seen that advance ruling could be sought by applicant on a specific question, and that the same should be in respect of the situations as referred in clauses (a) to (g) of Section 97 (2) of the CGST Act, 2017. 5.4 We observe that query Nos. 1 and 2 are specific in nature as they refer to a situation and that the questions are squarely covered under Section 97 (2) (e) of the CGST Act, 2017. Whereas the query at No. 3, viz., "Whether the interpretation of law as made by us in point 16 to this form is correct?", does not get covered under any of the clauses from (a) to (g) of Section 97 (2) of the CGST Act, 2017, as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arately indicated in the invoice issued by the pure agent to the recipient of service; and (iii) the supplies procured by the pure agent from the third party as a pure agent of the recipient of supply are in addition to the services he supplies on his own account. Explanation.- For the purposes of this rule, the expression "pure agent" means a person who - (a) enters into a contractual agreement with the recipient of supply to act as his pure agent to incur expenditure or costs in the course of supply of goods or services or both; (b) neither intends to hold nor holds any title to the goods or services or both so procured or supplied as pure agent of the recipient of supply; (c) does not use for his own interest such goods or services so procured; and (d) receives only the actual amount incurred to procure such goods or services in addition to the amount received for supply he provides on his own account." From the above, it could be seen that under the Explanation' to Rule 33, the expression Pure Agent' has been defined as a person who, (i) enters into a contractual agreement with the recipient of supply, (ii) neither intends to hold nor holds any title to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the 'pure agent' concept, prima facie, has to be an 'expenditure' or 'cost', which was incurred by the supplier as a pure agent of the recipient of supply. This is not so in the instant case of the applicant, because they have neither incurred any expenditure / cost on their own account, nor they have made payment to any third party, in this regard. 5.9 We take note of the fact that the applicant has relied on the following Advance Rulings in support of their stand, viz., a. CADMAXX Solutions Education Trust (AAR - Karnataka) - 85/2019 b. Patle Eduskills Foundation (AAR - Maharashtra) - 53/2020-21 c. 2COMS Foundation (AAR - Maharashtra) - 78/2020-21 d. Yashawi Academy for Skills (AAR - Maharashtra) - 84/2019 At this juncture, we would like to make it clear that Advance Rulings apply only to the applicant concerned as per Section 95(a) of the CGST Act, 2017, under the facts and circumstances of the respective cases, and are not to be applied in general. However, the persuasive effect that it brings to the case is not be undermined. Accordingly, the cases referred by the applicant are considered and perused and we find that in none of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not arise at all, as the expenses in this case are admittedly not reimbursed in actuals. It becomes imperative to reiterate here that reimbursement in actuals, i.e., without any margin or mark-up is not the only criteria to determine the concept of Pure Agent', and that it involves fulfillment of many other conditions as well, as laid down under rule 33 of the CGST Rules, 2017. Under the facts and circumstances of the case, the appellant does not act as a Pure Agent' as far as it relates to the supply involving the sale of Uniforms and shoes and the amount of Insurance Premium to industry partner, and accordingly, the same becomes taxable under the CGST Act, 2017.
6. In view of the detailed discussions supra, we rule as under :-
RULING
(i) The amount of stipend received from the industry partner by Logskim and paid to trainees without making any deduction, is chargeable to tax under the CGST/TNGST Acts, 2017.
(ii) The sale of Uniforms and shoes and the amount of Insurance Premium sold to the industry partner is chargeable to tax under the CGST/TNGST Acts, 2017.
(iii) We refrain from answering query No. 3, in view of the reasons discussed in para 5.4 above. X X X X Extracts X X X X X X X X Extracts X X X X
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