ATR Training for Commercial Pilots Not a “Qualification” but Deemed “Course Completion” with No Path to Employment; No GST Exemption Available: AAAR [Read Order]

The Appellate Authority for Advance Ruling (AAAR), Uttar Pradesh has upheld that the training provided to commercial pilots for obtaining Aircraft Type Ratings (ATRs) does not qualify as a “qualification” but is rather a “Course Completion” only and hence it is not eligible for Goods and Services Tax (GST) exemption.

The decision came in an appeal filed by CAE Simulation Training Private Limited against an earlier ruling of the Authority for Advance Ruling (AAR) that denied them exemption from GST for their training services.

CAE Simulation Training Private Limited, a subsidiary of Inter Globe Enterprises Limited, offers training to commercial pilots on Aircraft Simulators. The training is conducted in accordance with the curriculum approved by the Directorate General of Civil Aviation (DGCA) and is required for pilots to extend their ATR on their existing licenses.

The central question revolved around whether the training provided by CAE Simulation Training qualifies as part of a curriculum that results in a qualification recognised by law.

The applicant company argued that their services should be exempt from GST under Entry No. 66(a) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which covers services provided by educational institutions.

The applicant contended that completing their training program allows pilots to apply for the extension of ATR and thus the services provided by them shall be considered as a qualification recognised by law.

The authority noted that the training provided by the applicant does not directly lead to employment or self-employment opportunities for pilots.

The authority also highlighted the requirement that a pilot’s license must be endorsed with the specific aircraft rating by DGCA before they can seek employment as pilots for commercial airlines.

The AAAR examined the nature of the training and its outcome and concluded that the ATR training services provided by the applicant to the commercial pilots is not a Qualification recognised by law but is only a Course Completion as there is no direct culmination of employment or self-employment opportunities involved.

The authority also held that GST Exemption under Entry No. 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 is not available for such services.

The ruling is based on the fact that the completion of the training program does not directly lead to obtaining a qualification. Instead, pilots need to undergo separate examinations conducted by the DGCA to receive the necessary endorsements in their licenses for specific aircraft types. The completion certificate issued by CAE Simulation Training serves as a pre-requisite document for the DGCA examination but does not, in itself, confer the necessary qualification.

The authority interpreted that a qualification recognised by law should have a universal acceptance and significance, while the applicant’s course completion certificate was specific to their training program and not widely recognised as a qualification.

The two-member authority comprising Dr. Uma Shanker (CGST Member) and Smt. Minishy S (SGST Member) clarified that the training services provided by the applicant did not meet the criteria for an educational institution providing education as part of a curriculum for obtaining a recognised qualification under the GST exemption framework.

In result, the AAR concluded that the services were not eligible for exemption under entry number 66(a) of Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017.

To Read the full text of the Order CLICK HERE

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