Stipend paid to trainee subject to GST
In the case of Teamlease Education Foundation, Karnataka Authority for advance ruling has ruled that Stipend paid to trainee subject to GST.
The applicant is of the view that the reimbursement received towards stipend and cost of medical and accident insurance is an expenditure or costs incurred as pure agent of the industry partner (recipient of supply) as per rule 33 of CGST rules 2017. Therefor such reimbursements should be excluded from the taxable value and hence GST should not be charged on such reimbursements.
Ruling
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 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 applicant is not fulfilling the required condition.
In the view of the above the applicant does not qualify to be a pure agent and hence GST is chargeable on the entire transaction value.
The Applicant does not qualify to be a pure agent of the industry partner to the extend of reimbursement received towards stipend received to trainees on behalf of industry partner as part of training agreement and therefore the said reimbursement is chargeable to GST.
The Applicant does not qualify to be a pure agent of the industry partner to the extend of reimbursement received against cost of medical and accident insurance obtained for the benefit of trainees by the applicant and reimbursed by the industry partner as per the training agreement and therefore the said reimbursement is chargeable to GST.
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