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Taxable Services provided by partner organization of National Skill Development Corporation (NSDC)
September, 29th 2014

Clause (I) Section 66D of Finance Act 1994 inserted with effect from 01.07.2012 provides exemption to certain educational services by way of –

  1. Pre-school education and education up to higher secondary school or equivalent
  2. Education as a part of curriculum for obtaining a qualification recognized by any law for the time being in force
  3. Education as a part of an approved vocational education course

Relevant extract from Finance Act 2012 and Finance Act 2013 have been produced hereunder:

Finance Act 2012

CHAPTER-V (Service Tax)

(11) "approved vocational education course" means,-

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961; or (52 of 1961.)

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment; or

(iii) a course run by an institute affiliated to the National Skill Development Corporation set up by the Government of India;

FINANCE ACT 2013

CHAPTER-V (Service Tax)

Amendment of Act 32 of 1994

103. In the Finance Act, 1994,-

(A) in section 65B,-(i) in clause (II),-

(a) in sub-clause (i), after the words "National Council for Vocational Training", the words "or State Council for Vocational Training" shall be inserted;

(b) in sub-clause (ii), the word "or" occurring at the end shall be omitted;

(c) sub-clause (iii) shall be omitted;

Finance Act 2012 (as amended by Finance Act 2013) can be read as under:

(11) "approved vocational education course" means,-

(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training" or State Council for Vocational Training" offering courses in designated trades notified under the Apprentices Act, 1961; or (52 of 1961.)

(ii) a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Employment and Training, Union Ministry of Labour and Employment;

Exemption to services relating to National Skill Development Programme – services in relation to National Skill Development Programme, Vocational skill Development course or any other Scheme implemented by the National Skill Development Corporation (NSDC) is exempt w.e.f.10.09.2013 through Notification No. 13/2013 Service Tax dated 10th of September, 2013. (Insertion of Entry no 9A in the Notification No. 25/2012, service tax dated 20th June 2012.) This exemption is available to the National Skill Development Corporation, Sector Skill Council (SSC) approved by NSDC and assessment agency or training partner approved by NSDC or SSC.

It is pertinent to mentioned here that services provided by partner organization of National Skill Development Corporation (NSDC) were taxable during 10.05.2013 to 10.09.2013.

Disclaimer: The information in this article does not constitute legal advice, and reading of this article should not be perceived as initiation of a consultant-client relationship. Those persons seeking consultant -client privilege should establish a formal arrangement with a consultant practicing in the jurisdiction of their concern. Mr. Sachin Sharma should be contacted directly in cases of interest in establishing such an arrangement. We assume no responsibility for improper use of the information provided through this article.

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