No GST applicable on training fees where students are sponsored by the State Government
|
Case Details: |
Sachdeva Colleges Limited |
|
Appeal No.: |
Advance Ruling No. HR/HAAR/2020-21/16 |
|
Ruling pronounced by: |
GST AAR Haryana |
|
Date of ruling: |
23-06-2021 |
Brief Facts:
|
The applicant is a Limited Company engaged in providing training to the selected candidates sponsored by the Directorate of Welfare of Scheduled Caste and Backward Classes Department, Haryana. In terms of the agreement, the training fees is to be received from the Directorate of Welfare of Scheduled Caste and Backward Classes Department, Haryana. The applicant is of the view that since the entire expenditure is borne by the Government and there is as such no commercial activity, no GST is leviable thereon. Therefore, the applicant sought an advance ruling in respect of the availability of GST exemption on the training fees so received by it from the State Government. |
|
The State of Haryana through Excise and Taxation Commissioner, Haryana has stated that there is no GST payable on schemes related to training in terms of Entry No. 72 of Haryana Department vide Notification No. 47/52-2, dated 30.06.2017. Following services have been exempted by Notification No. 47-ST-2 (HGST) Entry No. 72 of HGST; 09/2017 (IGST) Entry No. 75 of IGST & 12/2017 (CGST) Entry 69 of CGST: “47-ST-2 (HGST) Entry No. 72 of HGST’ Services provided to the Central Government, State Government, Union Territory administration under any training programme for which whole expenditure is borne by the Central Government, State Government, Union Territory administration.” A similar exemption is available vide Entry No. 75 of Notification No. 09/2017- IGST & Entry No. 69 of Notification No. 12/2017- CGST |
Observations of the Authority:
This issue has already been dealt with the department on the representation of the Directorate of Welfare of Scheduled Caste and Backward Class Department, Haryana, and replied by the department vide this office memo No. 2072/GST-2 dated 21-06-2018 as below:
“It has been informed vide your referred memo (No. 2018/5314, dated 15-03-2018) that the Department of Welfare of SC and BC, Haryana implements 3 types of Centrally Sponsored Schemes. Regarding the schemes in which scholarship or monetary relief or grant is directly given to the beneficiary either in the Aadhar Enabled account or in the bank account, no GST is to be paid.
In the schemes related to imparting of training, the entry No. 72 of Haryana Government, Excise & Taxation Department, Notification No. 47/ST-2 dated 30-06-2017 (which deals with exemption of GST on services) may be perused as per which for “Services provided to the Central Government, State Government, Union Territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union Territory Administration”, the rate of tax is nil. Regarding other schemes in which there is either supply of goods or services, GST as applicable on supply of such goods or services or both shall be charged.”
This authority also agrees with the operative part of the above-stated letter issued to the Director, Welfare of Scheduled Caste and Backward Classes Department, Haryana.
Ruling:
- Therefore, the training imparted by the applicant to the students selected through the Directorate of Haryana for JEE (Non-Med.) and NEET (Medical) is exempt under entry 72 of Notification No. 47 of the HGST Act subject to that the whole expenditure is borne by the Central/ State Government.
- Further, section 23 of the Act provides that “any person engaged exclusively in the business of supplying goods and services or both that are not liable to tax or fully exempt from tax under this Act or under the IGST Act.” So, the applicant is not liable for registration till he supplies goods and services or both that are not liable to tax or fully exempt from tax under the GST Acts.
Disclaimer: The above article is based on the ruling pronounced by Haryana Advance Ruling Authority and is meant for informative purposes only. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
