Case Law Details
In re Patle Eduskills Foundation (GST AAR Maharashtra)
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 discharges tax. The entire process is done under a written agreement between the Entities/Trainer Institutes and the applicant. The applicant, in lieu of agreements with the industry partners, prepares monthly attendance record of the trainees, processes stipends of the trainees, makes payment of stipend to the apprentices and discharges all functions & duties as mandated to be performed as a facilitator under NEEM Regulations including preparation and submission of monthly invoice relating to payment of stipend.
Regarding the issue in respect of stipend paid to the trainees by the applicant, it has been submitted by the applicant that Entities/Training Institutes mentioned 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 are provided by the trainees to the Entities/Training Institutes, for which stipend is mandated to be paid to the trainees by the Entities/Training Institutes, this stipend is not directly paid to the trainees by the said Entities/Training Institutes but is routed through the applicant as per the NEEM Regulations. The entire amounts received as stipend from the Entities/Training Institutes are paid to the trainees without any amount being retained. Thus, the applicant is only acting as an intermediary in collecting the stipend from the Entities/Training Institutes and then disbursing the same to the trainees in full without making any deductions from the stipend before disbursement to the trainees. The applicant is only a conduit for the payment of stipend and the actual service is supplied by the trainees to the Entities/Training Institutes against which stipend is payable. The amount of stipend received by the applicant from the Entities/Training Institutes 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 Entities/Training Institutes 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 M/s Yashaswi Academy for Skills, 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 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.
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