Stipend paid to Industrial trainees subject to GST: Karnataka AAR

In this matter, the Applicant was acting as a pure agent of the Industry partner and he received reimbursement received towards stipend paid to trainees on behalf of the Industry partner. This was part of the training agreement and therefore as per Applicant, the said reimbursement is not chargeable to GST.

As per the Authority of Advance Ruling (AAR), the Applicant does not qualify to be a pure agent of the Industry partner to the extent of reimbursement received towards stipend paid to Trainees on behalf of Industry partner as part of training agreement and therefore the said reimbursement is chargeable to GST.

As per Authority Rule 33 (iii) of the CGST Rules, 2017 stipulates that the applicant must procure certain supplies from the third party, as a pure agent of the recipient of the supply, which are in addition to the services he supplies on his own account. In the instant case, the applicant has not furnished any information with regard to procurement of supplies from the third party i.e. trainees. Thus the applicant is not fulfilling the required condition.

This Advance Ruling came in matter of Teamlease Education Foundation and was pronounced by Karnataka Authority of Advance Ruling.

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