The Central Board of Indirect Taxes and Customs ( CBIC ) has clarified the applicability of the Goods and Services Tax ( GST ) on the Industrial Training Institutes.
With regard to the applicability of the GST on vocational training provided by private ITIs in designated trades and in other than designated trades, it was clarified that Private ITIs qualify as an educational institution as defined under para 2(y) of notification No. 12/2017-CT(Rate) if the education provided by these ITIs is approved as vocational educational course. It was said that as per the notification, services provided by a private ITI in respect of designated trades notified under Apprenticeship Act, 1961 are exempt from GST. “As corollary, services provided by a private Ill in respect of other than designated trades would be liable to pay GST and are not exempt,” the circular said.
It was further clarified that in case of designated trades, services provided by a private ITI by way of conduct of entrance examination against consideration in the form of entrance fee will also be exempt from GST.
The Board clarified that service provided by a private Industrial Training Institute for conduct of examination against consideration in the form of entrance fee and also on the services relating to admission to or conduct of examination. “Further, in respect of such designated trades, services provided to an educational institution, by way of, services relating to admission to or conduct of examination by a private ITI will also be exempt [Entry (b(iv)) under Sr. No. 66 of notification No. 12/2017-CT(Rate) refers]. It is further clarified that in case of other than designated trades in private ITIs, GST shall be payable on the service of conduct of examination against consideration in the form of entrance fee and also on the services relating to admission to or conduct of examination by such institutions, as these services are not covered by the exemption ibid,” it said.
It also pointed out that in case of Government ITIs, the services provided by a Government ITI to individual trainees/students, is exempted from taxation as these are in the nature of services provided by the Central or State Government to individuals.
Such exemption in relation to services provided by Government ITI would cover both — vocational training and examinations conducted by these Government it is, it said.
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