The Appellate Authority for Advance Ruling (AAAR), Uttar Pradesh branch has affirmed that the training provided to commercial pilots to acquire Aircraft Type Ratings (ATRs) is not considered a “qualification” but rather is considered just a “Course Completion”, therefore it is ineligible for Goods and Services Tax (GST) exemption.
This decision was taken when an appeal was filed by CAE Simulation Training Private Limited against an earlier ruling by the Authority for Advance Ruling (AAR) that refused GST exemption for their training services.
CAE Simulation Training Private Limited, a subsidiary of Inter Globe Enterprises Private Limited, provides training to commercial pilots using Aircraft Simulators. This training is in accordance with the curriculum approved by the Directorate General of Civil Aviation (DGCA) and pilots must extend their ATR on their existing licenses.
The central issue was whether CAE Simulation Training’s services qualify as part of a curriculum leading to a recognized qualification.
The applicant company contended that their services should be exempt from GST under Entry No. 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which included services furnished by educational institutions.
The applicant stated that completing their training program permits pilots to apply for ATR extension, therefore making their services a legally recognized qualification.
The authority noted that the training provided doesn’t directly make the pilots job-ready or have self-employment opportunities.
Additionally, the authority emphasized that DGCA must endorse a pilot’s license with specific aircraft ratings before they can be eligible for any employment as commercial airline pilots.
The AAAR learned the training’s nature and outcome, concluding that ATR training services do not constitute a legally recognized qualification. Instead, they are considered as Course Completion, as it does not provide employment or self-employment opportunities.
Moreover, the authority stated that GST exemption under Entry No. 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 does not apply to these services.
The ruling is given on the grounds of the fact that completing the training program doesn’t directly lead to obtaining a qualification. Pilots must undergo separate DGCA examinations to obtain endorsements in their licenses for specific aircraft types. Even though, the CAE Simulation Training certificate is a prerequisite for the DGCA examination but does not make a recognised qualification.
The authority made it clear that a legally recognized qualification should have universal acceptance and significance, while the applicant’s course completion certificate indicates that the candidate has undergone a specific training program but the certificate is not widely acknowledged as a qualification as per the law.
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The two-member bench, Dr. Uma Shanker (CGST Member) and Smt. Minishy S (SGST Member), explained that the applicant’s training services don’t meet the criteria for an educational institution providing education as part of a curriculum leading to a recognized qualification under the GST exemption structure.
In the end, the AAR decided that the services were not eligible for exemption under entry number 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017.
| Appellant Name | M/s CAE Simulation Training Private Limited |
| GSTIN | 09AAECC7113K1ZL |
| Date | 31.05.23 |
| UP AAAR | Read Order |
