CESTAT Quashes Service Tax Demands on Vocational Training Services, Rules Activities Exempt and Barred by Limitation [Read Order]
The tribunal observed that the appellant’s activities qualified for exemption under Notification 25/2012-ST, which covers training partners approved by the National Skill Development Corporation (NSDC) or Sector Skill Councils (SSCs)
![CESTAT Quashes Service Tax Demands on Vocational Training Services, Rules Activities Exempt and Barred by Limitation [Read Order]](https://images.taxscan.in/h-upload/2025/07/21/2066881-cestat-kolkata-cestat-quashes-service-tax-demands-taxscan.webp "CESTAT Quashes Service Tax Demands on Vocational Training Services, Rules Activities Exempt and Barred by Limitation [Read Order]")
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has set aside service tax demands totalling around Rs. 52 lakhs, noting that the company’s skill development courses were exempt under government notifications and that the tax authorities’ claims were time-barred. The assessee, M/s. M.M. Group, a Malda-based vocational training provider,...
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has set aside service tax demands totalling around Rs. 52 lakhs, noting that the company’s skill development courses were exempt under government notifications and that the tax authorities’ claims were time-barred.
The assessee, M/s. M.M. Group, a Malda-based vocational training provider, had appealed before the CESTAT for relief for the demands imposed on the company for the financial years 2014–15 to 2017–18.
In this case, for financial years 2014–15 to 2017–18, M.M. Group provided vocational courses like Advance Diploma in IT, Bengali/English Typing, and Land Surveyor training under schemes like the Skill Development Initiative (SDI) and the Prime Minister’s National Skill Development Mission. The courses, approved by the National Council for Vocational Training (NCVT), were funded entirely by government agencies such as EdCIL, Allah University, and West Bengal’s minority development corporation.
The company contended it had no control over trainee selection, curriculum, or fees, rendering its services exempt under Notification 25/2012-ST and Section 66D of the Finance Act, 1994, which excludes approved vocational education courses from taxation.
The tax department contested this, alleging suppression of facts based on TDS records showing income under Sections 194C and 194J of the Income Tax Act. Two show-cause notices were issued, one in 2019 for Rs. 12.04 lakhs (2014–15) and another in 2020 for Rs. 40.83 lakhs (2015–18), both invoking the extended five-year limitation period for fraud or suppression.
The demands were initially confirmed by lower authorities but faced stiff resistance from M.M. Group, which cited a 2013 letter from the Malda Range Superintendent affirming non-taxability under CBEC Circular 164/15/2012-ST.
The tribunal observed that the appellant’s activities qualified for exemption under Notification 25/2012-ST, which covers training partners approved by the National Skill Development Corporation (NSDC) or Sector Skill Councils (SSCs).
The bench relied on the Hyderabad CESTAT ruling in SRK Innovatives School of Information Pvt. Ltd. v. Pr. Commissioner of Central Tax, Visakhapatnam, GST [2025 (5) TMI 262 – CESTAT Hyderabad], where similar skill development programs were held exempt despite lacking formal NSDC certification.
The tribunal quashed the demands as time-barred, noting the department’s prior awareness of M.M. Group’s activities.
The Technical Member, K. Anpazhakan, noted the alignment of the appellant’s programs with national skill development initiatives and criticized the department for ignoring prior clarifications provided to the assessee.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
