Skill Development Programmes Approved By Govt Qualify For Service Tax Exemption: CESTAT

K. Anpazhakan (Technical Member) stated that the programme undertaken by the assessee is approved by the Government and hence the activity undertaken by them is eligible for the exemption from payment of Service tax, as the said activity are covered under Sl. No. 9A of Notification No. 25/2012-S.T. dated 20.06.2012.

The assessee/appellant is engaged in providing vocational training and skill development services and are registered as a Vocational Training Provider (VTP) in the State of West Bengal, with the Director of Industrial Training, Govt. of West Bengal.

As such, under a bonafide impression that their activities were not liable to Service tax as they were exempt under Notification 25/2012-ST dated 20.06.2012 and under Section 66D of the Finance Act, 1994, the assessee had filed Nil Service Tax Returns for the material period.

Accordingly, a Show Cause Notice was issued proposing to demand Service Tax along with interest and penalty, by invoking the extended period of limitation.

The above Notice alleged that the assessee had failed to pay Service Tax on vocational training services and had suppressed facts from the Department.

The Assistant Commissioner, confirmed the demand, holding that the assessee's activities do not qualify for exemption under Section 66D(1)(iii) of Finance Act, 1994.

Being aggrieved, the assessee preferred an appeal before the Commissioner (Appeals) which was rejected, primarily holding that the assessee failed to establish that their services fall under approved vocational education course exemption.

The assessee submitted that the programme is approved by the Ministry of Skill Development & Entrepreneurship, Government of India, as they are registered with the Paschim Bangla Society for Skill Development (PPSSD), which acts as the state implementing agency for Sector Skill Council (SSC). Accordingly, the services rendered by them are specifically exempt from service tax by virtue of Sl. No. 9A of Notification No. 25/2012-S.T. dated 20.06.2012.

The department submitted that the assessee had only submitted a copy of the Certificate issued by the Directorate of Industrial Training, regarding registration of VTP in the State of West Bengal under SDI Scheme. The content of the subject letter was that the approval of VTP registration under SDI Scheme was accorded to the institute of the assessee to conduct training programme in the approved courses as mentioned in enclosed List. Moreover, the assessee had not adduced any evidence in support of their claim which fulfils the conditions for availing the benefit of exemption from tax.

The Tribunal observed that the programme of Skill Development Initiative Scheme (SDIS) based on Modular Employable Skills” is approved by the Ministry of Labour and Employment, Government of India.

The bench further opined that the assessee has undertaken this programme as a training partner approved by the National Skill Development Corporation and thus, the assessee is eligible for the exemption from payment of service tax as provided under of Sl. No. 9A of Notification No. 25/2012-S.T. dated 20.06.2012.

In view of the above, the Tribunal allowed the appeal.

Case Title: M/s. M.M. Group v. Commissioner of C.G.S.T. and Central Excise

Case Number: Service Tax Appeal No. 75950 of 2022

Counsel for Appellant/ Assessee: Shreya Mundhra

Counsel for Respondent/ Department: S.K. Jha

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