The Maharashtra bench of Authority for Advance Rulings (AAR) ruled that the amount of stipend provided to trainees would not draw GST.
The Applicant, M/s Patle EduSkills Foundation is registered in the GST compliance and does the business of Human Resource & Skill Development and is a facilitator beneath the National Employability Enhancement Mission (‘NEEM Scheme’) of the Government of India. The NEEM scheme’s purpose is to make the labour skilled by providing the on-job practical training to the trainees to increase their employability. Facilitators are needed to partner with several trainers like employers/companies/industries under the NEEM scheme towards the purpose of finishing of training of the trainees and imposes a fixed fee of Rs 1500 per trainee per month via these entities.
The bench consisting of Rajiv Magoo and T.R. Ramnani, held that the first question does not link to any of the matters noted in clauses (a) to (g) of Section 97 (2) of the CGST Act, 2017 hence no conclusion was given for that.
Towards the payment of the stipend to the trainees, under the agreement, a monthly stipend would be furnished to the trainees via the trainer institute by providing the cheque in the applicant’s name who would need to make these payments to the trainees. The applicant specified that he needs to act as a pure agent of the trainer institute beneath rule 33 of the CGST Act.
Under the agreements, the applicant needs to release all the additional functions and duties which is mandatory to function as a facilitator under NEEM Regulations such as Preparation and submission of the monthly invoice concerning the payment of the stipend to the trainees in which the stipend amount would require to be mentioned in the invoice.
Read Also: GST Impact on Indian Educational System
In the identical case of M’s Yashaswi Academy towards skills, the same was ruled that the reimbursement by industry partner to the applicant, the stipend furnished to the trainees would not draw GST. as the facts are identical to the points of the mentioned case, the court would have no choice to get diverge from our ruling mentioned in the case which was indeed applicable in the related case. The decision is made that the stipend amount would not form a portion of the taxable value.
