No GST is leviable on reimbursement received by the applicant with regard to the stipend paid to trainees

The applicant, M/s. 2COMS Foundation was enrolled as a facilitator under National Employability Enhancement Mission (NEEM), a scheme notified by the Government of India through the All-India Council of Technical Education (AICTE) in 2017 whose primary objective was to generate skilled labour by making provisions to facilitate “on job practical training” to trainees to enhance employability of a person. As a NEEM Facilitator, the applicant is responsible to enroll NEEM trainees and provide them with on-job practical training through industrial partners to enhance the prospects of their employment.

The applicant seeks an advance ruling that whether the reimbursement received by ZOOMS foundation for the stipend paid to students, attracts GST.

It was observed in the instant case, that the stipend paid by the applicant to trainees is reimbursed in an exact match of the amount paid. Also, no profit is made during reimbursement of the amount. It is envisaged that separate administrative charges are by the applicant for providing services of processing of stipend amounts.

The applicant had fulfilled conditions (a) to (d) in the explanation to Rule 33 which defines ‘Pure Agent’, it may be concluded that the applicant is a Pure Agent. Thus, the applicant is acting as a pure agent so far as receiving reimbursement of stipend amounts from the various Trainer Institutes and remitting the same to the trainees is concerned.

In the present case, the applicant is merely acting as a pure agent so far as collection and the payment of stipend to the trainees are concerned. Thus, the applicant’s recovery of such expenses is a disbursement and hence does not form a part of the value of supply in accordance with rule 33 and hence, is excluded from the taxable value of supply. Therefore, no GST is leviable, on reimbursement received by the applicant with regard to the stipend paid to trainees on behalf of industrial partners.

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