In the Goods and Services Tax (GST) Act 2017, skill development services are treated differently depending on the specific type of service and the entity providing it. Here’s a breakdown:

Exempt Skill Development Services:

• Services by Approved Training Partners:Any services provided by a training partner approved by the National Skill Development Corporation (NSDC) or a Sector Skill Council (SSC) are exempt from GST Act 2017 , specifically in relation to vocational skill development courses under the National Skill Certification and Monetary Reward Scheme (NSQF-RPL). This exemption promotes skill development initiatives backed by the government.
• Core Educational Services:Education services, including vocational education, provided by recognized educational institutions are exempt from GST Act 2017. This exemption covers services like school, college, and university education, as well as vocational training offered by such institutions.

Taxable Skill Development Services:

• Commercial Skill Development Services:Skill development services provided by non-approved entities or not covered by the specific exemption schemes fall under the standard GST rate of 18%. This includes private skill development institutions, training programs not included in NSQF-RPL, and skill development services provided as part of broader consultancy or outsourcing contracts.
• Ancillary Services:Services linked to skill development but not considered core educational services, like providing training materials, infrastructure, or placement assistance, might be taxable at applicable GST Act 2017 rates depending on their specific nature.

Here are some additional points to consider:

• The GST rate applicable to a specific skill development service can be complex and depends on factors like the provider, type of service, and beneficiaries. Always consult with a tax professional for specific guidance.
• The government actively updates and refines GST Act 2017Staying updated on these changes is crucial for businesses involved in skill development services.

EXAMPLE

In the Goods and Services Tax (GST) Act 2017, skill development services are treated differently depending on the specific type of service and the entity providing it. Here’s a breakdown:

Exempt Skill Development Services:

• Services by Approved Training Partners:Any services provided by a training partner approved by the National Skill Development Corporation (NSDC) or a Sector Skill Council (SSC) are exempt from GST ACT 2017, specifically in relation to vocational skill development courses under the National Skill Certification and Monetary Reward Scheme (NSQF-RPL). This exemption promotes skill development initiatives backed by the government.
• Core Educational Services:Education services, including vocational education, provided by recognized educational institutions are exempt from GST Act 2017. This exemption covers services like school, college, and university education, as well as vocational training offered by such institutions.

Taxable Skill Development Services:

• Commercial Skill Development Services:Skill development services provided by non-approved entities or not covered by the specific exemption schemes fall under the standard GST rate of 18%. This includes private skill development institutions, training programs not included in NSQF-RPL, and skill development services provided as part of broader consultancy or outsourcing contracts GST Act 2017.
• Ancillary Services:Services linked to skill development but not considered core educational services, like providing training materials, infrastructure, or placement assistance, might be taxable at applicable GST rates depending on their specific nature.

Here are some additional points to consider:

• The GST rate applicable to a specific skill development service can be complex and depends on factors like the provider, type of service, and beneficiaries. Always consult with a tax professional for specific guidance.
• The government actively updates and refines GST Act 2017Staying updated on these changes is crucial for businesses involved in skill development services.

FAQ QUESTION

AQs on Skill Development Services and GST Act 2017

Here are some frequently asked questions about the Goods and Services Tax (GST) implications for skill development services under the GST Act 2017:

Q: Are all skill development services taxable under GST Act 2017?

A: No, not all skill development services are taxable under GST. The GST applicability depends on various factors, including:

• Nature of the training:Training provided under certain government schemes like Deen Dayal Upadhyaya Grameen Kaushalya Yojana is exempt from GST Act 2017.
• Training provider:Services provided by training providers approved by the National Skill Development Corporation (NSDC) or Sector Skill Councils under the National Skill Certification and Monetary Reward Scheme are also exempt.
• Type of course:Vocational skill development courses certified by the National Council for Vocational Training are generally exempt.

Q: What is the GST rate for taxable skill development services?

A: The standard GST rate for taxable skill development services is 18%. However, some specific services may attract a lower rate or even be exempt under specific notifications.

Q: Who is responsible for paying GST on skill development services?

A: The responsibility for paying GST lies with the service provider, i.e., the entity providing the skill development training. They need to register under GST if their annual turnover exceeds the prescribed threshold.

Q: How can I determine the GST applicability for my skill development service?

A: It’s advisable to consult the relevant notifications issued by the GST Council or seek guidance from a tax professional. They can assess your specific circumstances and provide accurate advice on GST Act 2017 applicability and rates.

CASE LAWS

There are several case laws related to skill development services under the GST Act, 2017. Some of the key ones include:

Exemptions:

• Notification No. 12/2017-Central Tax (Rate), dated 28th June, 2017:This notification exempts various services from GST, including:
  • Entry 69:Services provided by National Skill Development Corporation (NSDC) set up by the Government of India, or any other Scheme implemented by NSDC.
  • Entry 70:Services provided by an assessing body empanelled by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship, in relation to skill development initiative scheme.
• NO-348/2019-20 (KAR AAR):This case clarifies that sub-contractors providing skill development training to Building and other construction workers under a contract with Maharashtra State Skill Development Society (MSSDS) are not exempt under Entry 69, and instead subject to 18% GST Act 2017.

Taxability:

• Shri B. Sen thilvelavan, I. R. S., Additional Commissioner/Member, Office of the Principal Chief Commissioner of GST & Ce (TN-02-AAR-2021):This case clarifies that skill development services provided by a State Skill Development Corporation set up by the Government of Tamilnadu are exempt under Entry 69, even if the corporation is not registered under GST Act 2017.
• IMS Proschool Pvt Ltd. (Maharashtra AAR):This case clarifies that vocational training courses offered by a private company are taxable under GST Act 2017  at 18%, as they do not fall under any specific exemption notification.

Other important cases:

• Directorate of Skill Development, Department of Technical Education, Skill Development & Employment (MP AAR):This case deals with the GST Act 2017liability of a Government department providing skill development services.

It’s important to note that these are just some of the key case laws, and the applicability of a particular case law will depend on the specific facts and circumstances of each situation under GST Act 2017.