The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench, has ruled that services provided under approved skill development schemes are exempt from service tax. The Tribunal set aside tax demands exceeding Rs. 52 lakh raised by the tax department for training programs conducted between 2014 and 2017.
The bench of K. Anpazhakan (Technical Member) has observed that The training services provided qualified under the exemption outlined in Notification No. 25/2012-ST, specifically Sl. No. 9A, which exempts services provided by NSDC-approved training partners and courses conducted under NSDC-implemented schemes.
The appeals concerned a vocational training organization based in West Bengal, which was registered with the Director of Industrial Training, Government of West Bengal, and had been delivering Modular Employable Skill (MES) courses under the Ministry of Labour and Employment’s Skill Development Initiative (SDI).
The courses were fully funded by government bodies such as EdCIL, Aliah University, and the West Bengal Minorities Development & Finance Corporation, with no direct collection of fees from students.
Despite this, show-cause notices were issued by the Service Tax Department demanding service tax on the training activities, alleging that they did not fall under exempted categories.
The tribunal noted that the appellant was registered under the SDI Scheme and worked with state-approved agencies such as Paschim Banga Society for Skill Development (PBSSD), fulfilling the requirements for exemption.
The Tribunal rejected the tax department’s invocation of the extended period of limitation, citing the appellant’s prior correspondence with the Range Office, which had acknowledged that service tax was not applicable to such vocational education programs.
The second show-cause notice was held to be time-barred as the issue had already been covered in an earlier notice, in line with the Supreme Court’s ruling in Nizam Sugar Factory.
Case Details
Case Title: M/s. M.M. Group Versus Commissioner of C.G.S.T. and Central Excise
Case No.: Service Tax Appeal No. 75950 of 2022
Date: 15.07.2025
Counsel For Appellant: Shreya Mundhra, Advocate
Counsel For Respondent: S.K. Jha, Authorized Representative
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