In re Tamilnadu Skill Development Corporation (GST AAAR Tamilnadu)
The facts of whether the appellant is a ‘Government entity’, whether all the activities are extended only to the State Government and whether the consideration received is limited to the `grants’ are fresh facts to be verified/ analysed with the respective documentary proof. Section 100(1) of the GST Act, which provides for the authority to act on receipt of the appeal application, as follows:
(1) The Appellate Authority may, after giving the parties to the appeal or reference an opportunity of being heard, pass such order as it thinks fit, confirming or modifying the ruling appealed against or referred to.
Thus, it is clear that this Appeal authority under GST (AAAR) can either confirm or modify the facts examined by the, Lower Authority (LA/AAR) and ruling extended. It is evident that the appellant seeks ruling on a different set of facts which were not put forth before the LA. The appellant has not contested the basis of the ruling extended by LA and accepts that after receipt of the ruling by the LA, they have been snow guided and rightly so that they are not to be required on the application of Entry 9C, which is a new ground not examined by the LA and therefore this forum cannot adduce any ruling on the same. The appellant has not contested the applicability of the entries 69 & 70 of the Notification, on the support of which, they had claimed exemption for registration before the LA. Hence, we hold that there appears no reason to interfere with the ruling of the LA. However, we leave it open for the appellant to approach the LA separately with the new ground, if they choose to do so.
Read AAR Order: Tamilnadu Skill Development Corporation liable to Register under GST
FULL TEXT OF THE ORDER OF APPELLATE AUTHORITY OF ADVANCE RULING, TAMILNADU
At the outset, we would like to make it clear that the provisions of both the Central Goods and Service Tax Act and the Tamil Nadu Goods and Service Tax 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 Service Tax Act,2017 would also mean a reference to the same provisions under the Tamilnadu Goods & Services Tax Act, 2017.
The subject appeal is filed under Section 100(1) of the Tamilnadu Goods & Services Tax Act 2017/Central Goods & Services Tax Act 2017 (hereinafter referred to ‘the Act’) by Tamilnadu Skill Development Corporation (hereinafter referred to as ‘Appellant’ or TNSDC). The appellant is unregistered for the purposes of GST and the appeal is filed against the Order No.02/ARA/2021 dated 25.02.2021 passed by the Tamil Nadu State Authority for Advance ruling on the application for advance ruling filed by them.
2.1 The Appellant has stated that Tamil Nadu Skill Development Corporation is a company incorporated under Section 25 of the Companies Act and is wholly owned and managed by Government of Tamil Nadu. The core activity is to provide employable Skill Training to the youth of Tamil Nadu. The appellant is a Government Entity providing service in the form of up-skilling training to persons specified under the schemes of Central and State Governments for which consideration is received in the form of Grants. They had filed an application before Hon’ble Authority for Advance Ruling, seeking clarification on the following question:
Whether the applicant is required to be registered under this Act – National Skill Development Corporation has been Registered under the Act similarly State Government has formed this corporation for giving Training to unemployed youth. Hence requested we may be registered under the act vide G.O. No.73, Commercial Taxes and Registration(B1), 29th June 2017, Serial No. 69 Heading 9992 or Heading 9983 or Heading 9991 and Serial No. 70 Heading 9985.
3. The Original Authority has ruled as follows:
Tamil Nadu Skill Development Corporation is not exempted vide entry Sl.No. 69 and Sl.No.70 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 and therefore, required to be registered under the CGST/TNGST Act 2017
4. Aggrieved by the above decision, the Appellant has filed the present appeal. The Grounds of appeal are as follows:
> The focus of the submission as well as AAR’s ruling was only on application of Entry 69 & 70. The fact of Grants and Entry 9C was not brought out. The accent was alignment of the TNSDC’s activity with NSDC and therefore ought to be exempt on the same lines. AAR applied the Entries 69 & 70 by the letter and rejected TNSDC’s contention.
> The executive head of the corporation is its Managing Director who is from the IAS cadre. Its Board of Directors are secretaries of the State Government drawn from various related departments like Finance, Labour, Education etc. All Directors are appointed by the state Government. The Board also has representatives from CII, FICCI and Tamil Nadu Small and Tiny Industries Association. It comes under the supervision of the Ministry of Labour and Employment.
> They receive funds from the State Government as a grant. Each grant has a condition attached to it specifying the purpose of the grant and the nature of training to be imparted. The specification of nature of training is generally with reference to industries, like up-skilling of garment workers, automobile mechanics, re-skilling for IT enabled services etc. The funds received from the Government are banked and spent only for the purpose for which it is received. Any excess fund is kept in bank account in accordance with the directions of the Government. The direct expenditure of the corporation is on professional charges to trainers and conveyance allowance to attendees. Indirect expenditure consists of overheads and administrative cost.
> They have empanelled training institutions for each sector. Such empanelled institutions are spread throughout Tamil Nadu. There are also skilled individuals who are commissioned by the corporation for specific programs. They publicize their training schedule through appropriate channels. Such publicity draws students and trainees who register themselves for specific programs. They have a selection process for trainees based on their existing skill sets, educational background and suitability for the specific program. Such selected trainees are then allowed to attend the training programs. Each attendee is provided with a certificate on completion of the training program. The corporation also conducts training programs scheduled by it through its training partners. It also conducts programs under the schemes of the Central Government and National Skill Development Corporation ,(NSDC). The training programs under the Central Government umbrella is done on sharing basis where the Central and State Governments share the expense on agreed proportion.
> They provide training services to identified persons through its Training Partners and District Offices in the implementation of programs and schemes of the Central and State Governments. The trainees for each program is specified in the respective schemes. They receive consideration for implementation of various programs and projects of the Central and State Governments only in the form of grants
> TNSDC is a Tamil Nadu Government entity incorporated under the directions of GO: Ms.No.30 dated 11.01.2013 as a Company under the Companies Act, 1956. The Hon’ble Governor holds 49,994 shares of the total 50,000 shares.
> Clause 5 of Main Objects clause of MOA of TNSDC reads that TNSDC is established to act as a Nodal Agency/Apex Institution for all the State Government Departments and State Public Sector Undertakings involved in imparting skill trainings.
> The LA had been sensitized of the fact that only revenues of TNSDC are grants from Government, nature of their activities, operational model and various schemes implemented by them.
> The appellant has tabulated the details of NSDC 8v TNSDC as below:
> TNSDC has been granted registration u/s 12AB of the Income Tax Act 1961 from Assessment year 2022-23 to 2026-27.
> The Appellant submits that the Hon’ble Authority for Advance Ruling ought to have seen the following facts:
