GST Exemption for Skill Development Training Services in Madhya Pradesh
The Authority for Advance Ruling decided that private training partners providing services to a society are not eligible for GST tax exemptions.
- Ruling
- Order Number 04/2019 dated 10.04.19
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- The company asked if their training services were exempt from GST.
- The exemption applies only to services provided directly to government bodies.
- The Authority ruled that a society is not automatically considered the government.
- The exemption claim was denied because the service recipient was a society.
In short
The company asked the Authority for Advance Ruling (AAR) if their skill development training services for the Uttar Pradesh Skill Development Society (UPSDS) qualified for a GST exemption. The law provides tax relief for training services, but only when provided directly to the Central or State Government. The Authority had to decide if a society counts as the government for these tax purposes.
What has changed
How it worked before
Many private training partners assumed that providing services to government-affiliated societies or autonomous bodies would qualify for the same tax exemptions as services provided directly to government departments.
What has changed
The Authority ruled that the exemption is strictly for services provided to the government itself. Because the company could not prove the society was an arm of the government, they must pay GST on their services. This means private partners working with societies cannot assume their services are tax-exempt.
Who this affects
Private training partners and vocational training providers working with government-affiliated societies or autonomous bodies.
An example
Imagine a private firm, SkillTrain Pvt Ltd, provides training to a state-run sports society. They might wonder if they can stop charging GST based on this ruling. This ruling suggests that unless they can prove the society is legally part of the government, they must continue to charge and pay GST.
What you should do
If you provide similar services, do not assume you are exempt from GST. An advance ruling only binds the company that asked and its specific tax officer. You should consult with a tax professional to review your specific contract and the legal status of the entity you serve before deciding not to collect GST.
If you do nothing
If you stop charging GST based on this ruling and a tax officer disagrees, you will be liable for the unpaid tax plus interest and penalties. Tax authorities may view this as tax evasion. Relying on a ruling that does not apply to your specific situation is a significant financial risk.
The terms explained
- Advance Ruling
- A formal decision from tax authorities on how GST law applies to a specific business situation. It is only binding for the business that requested it.
- Exemption
- A legal provision that allows a business to not pay or collect tax on specific services or goods.
- Entity
- A business, organization, or society that is recognized as a separate legal unit.
The ruling in detail
Authority for Advance Ruling
M/s. Network For Information & Computer
Order Number 04/2019 dated 10.04.19 · Madhya Pradesh
Questions before the authority
- Whether exemption provided under Sr. No. 72 of Not. No. 12/2017 Central Tax(Rate), dated 28-06-17 issued by the Central Government under CGST Act, 2017 and exemption provided under Sr. No. 72 of Not. No. FA-3-42/2017/1/V(53) dated 30-06-2017 issued by the Madhya Pradesh Government under M.P. Goods & Services Tax Act, 2017 is applicable to the applicant?
- Whether services provided by the applicant fall under Sr. No. 72 of the Not. No. 12/2017 Central Tax(Rate), dated 28-06-17 issued by the Central Government under CGST Act, 2017 and exemption provided under Sr. No. 72 of Not. No. FA-3-42/2017/1/V(53) dated 30-06-2017 issued by the Madhya Pradesh Government under M.P. Goods and Service Tax Act 2017?
Facts
The applicant is a registered entity providing skill development training services to the Uttar Pradesh Skill Development Society (UPSDS). They sought an advance ruling on whether these services qualify for the tax exemption provided under Serial Number 72 of Notification No. 12/2017-Central Tax (Rate). The applicant acts as a private training partner for the UPSDS.
Ruling
| Question | What the authority ruled |
|---|---|
| Applicability of exemption under Sr. No. 72 | Not applicable Services must be provided to Central or State Government or Union Territory Administration |
The Authority ruled that the applicant is not entitled to the benefit of the exemption. It held that the exemption is only available if the services are provided directly to the Central Government, State Government, or Union Territory Administration. Since the applicant provided services to a society and failed to prove it was an arm of the government, the exemption was denied.
Reasoning
The ruling turned on the interpretation of the condition in Serial Number 72 of Notification No. 12/2017-Central Tax (Rate), which requires services to be provided to the Central Government, State Government, or Union Territory Administration. The Authority found that the applicant provided services to a society, UPSDS, and failed to provide evidence that this society constitutes the government. Consequently, the conditions for the exemption were not met. The Authority emphasized that the intent of the legislature is to exempt services provided directly to government bodies under specific training programs.
Provisions relied on
- Section 97(2)(b) of the CGST Act 2017
- Section 98(4) of the CGST Act 2017
- Section 11(1) of the CGST Act 2017
- Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017
- Notification No. FA-3-42/2017/1/V(53) dated 30.06.2017
For the practitioner
This ruling clarifies that the **exemption for training services** under Serial Number 72 is strictly limited to services provided directly to government entities. It serves as a warning to private training partners that providing services to societies or autonomous bodies may not qualify for the exemption unless they can prove the entity is effectively the government. It does not decide the taxability of services provided to other types of government-affiliated organizations.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/mp-04-2019-network_for_info_comp.pdf
Legibility of the scan, as read: high.
Prepared 20-10-2026.
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