In a recent ruling, the Karnataka Authority for Advance Rulings (AAR ) ruled that no GST exemption to Aircraft Type Ratings (ATR) training for commercial pilots since it does not result in qualification but only course completion.
M/s. CAE Flight Training (India) Private Limited, the applicant stated that they are a Directorate General of Civil Aviation (DGCA) Approved Training Organisation (ATO) engaged in the business of providing type rating training on simulators for various fleet of aircraft to the trainees aspiring to obtain licenses and ratings from the DGCA; that the flight training services imparted by the applicant (ATO) enhance the skill and knowledge of trainees.
The applicant provides both classroom-based training about the operations of aircraft and cockpit-based training. The training includes both dry as well as wet training. Dry training is training on the simulator, wherein the person undergoing training can obtain usage time on the simulator, to undertake the necessary simulation exercises on his own accord. On the other hand, wet training is a 35-day type of rating training session.
These training services are provided by the training curriculum approved by the DGCA to the trainees for obtaining the licenses and ratings specified in Rule 38 of the Aircraft Rules, 1937, and for obtaining Aircraft Type Ratings (ATRs).
Under Section 5(2) of the Aircraft Act, of 1934, the Central Government has been empowered to make Rules in respect of the licensing of persons engaged in the operation of aircraft, and the manner and conditions of the issue or renewal of any such licenses.
The applicant believed that the ATR extension training services provided thereby are exempt from the levy of GST under Sl. No. 66(a) of the Exemption Notification, since the Applicant qualifies as an educational institution, and such services are provided by them to their trainees. Further, the training services provided by the Applicant are covered under SAC 999294 as other education services.
Since the ATR extension training services provided by the Applicant are exempt from the levy of GST, there is no requirement for determining the rate of GST applicable thereon, or for the discharge of GST on such services.
A Coram comprising of Dr M.P. Ravi Prasad (State Member) and Sri. Kiran Reddy T (Central Member) observed that the applicant undertakes the supply of the ATR extension training services to their trainees as per the agreement. The pilots holding the CPL(A) have to undergo ATR extension training for the specific type of aircraft(s) to fly the said aircraft with commercial airlines.
It was submitted that the applicant imparts training to the trainees and thus provides ATR extension services. It was further stated that the Aircraft Act and the Aircraft rules did not approve the applicant institute for conduction of examination that yields a qualification, but only to issue a course completion certificate which is useful only as one of the enclosures to apply for the Type Rating examination conducted by the DGCA. Further, there is no circular applicable to the said Type of Rating training, being given by the applicant.
The Authority ruled that the impugned services of the applicant are not covered under entry number 66(a) of the Notification 12/2017-CentraI Tax (Rate) dated 28-06-2017, as and hence do not qualify for the exemption. The supply of the aircraft type rating training services to commercial pilots, by the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of aircraft type ratings on their existing licenses, does not result in qualification as the applicant imparts training and issues only course completion certificate and thus the impugned services are not covered under Sl. No. 66 (a) of Notification No. 12/2017Central Tax (Rate) dated 28.6.2017 and are eligible for GST under the CGST / KGSTAct 2017.
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