By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Whether vocational education courses not recognised by Statute or Authority like AICTE etc. were liable to service tax prior to 27-02- 2010? Held, No.
Facts:
The Respondent – ran courses to impart procedural and practical skill based training in areas such as export import management, retail management and merchandising and claimed exemption vide Notification No.9/2003 as well as 24/2004 dated 10-09-2004 under “Commercial or Coaching Services” provided by vocational/recreational training institute. The courses provided by the assesse were not accredited or certified by any Central or State Government or statutory authority such as AICTE
The revenue alleged that, the exemption Notification applied in terms only to vocational training imparted by Institutes such as ITI and State sponsored or recognised educational training institute generally imparting technical and vocational skills immediately after the 10+2 grade and not to Assessee’s institution which imparts managerial and management skills akin to MBA.
Held:
Tribunal decided in favour of the assesse. On appeal by the Department, the Hon’ble High Court affirming the decision of the Tribunal held that, the term “vocational training institute” included the commercial training or coaching centres providing vocational coaching or training meant to “impart skills to enable the trainees to seek employment or to have self-employment directly after such training or coaching”. The notion of such training institute having been recognised or accredited to nowhere emerges from such a broad definition. Further, Notification 3/2010- ST dated 27-02-2010 substitutes the existing explanation to the term “vocational training institute” and narrowing it to those institutes affiliated to National Council for Vocational Training offering courses in designated trade in fact supports the assessee. Had the intention been to exempt only such class or category of institutions, the appropriate authority would have designed such a condition in the original Notification of 2003 and Notification No.10 of 2004 which had been relied upon in this case.
