ORDER
Rohit Ranjan Agarwal, J.- Heard Sri Atul Gupta, learned counsel for the petitioner, Sri Anoop Trivedi, learned Additional Advocate General appearing for State along with Sri Arvind Kumar Mishra, learned Standing Counsel and Sri Parv Agarwal, learned counsel for respondent nos. 1 and 4.
2. Petitioner, CAE Simulation Training Private Limited is a joint venture between CAE Middle East Holding Ltd. and InterGlobe Enterprises Pvt. Ltd. It is a DGCA (Director General Civil Aviation) Approved Training Organisation (ATO) engaged in the business of providing training to commercial pilots comprising of ground school and training of aircraft simulators installed at its training facility for extension of Aircraft Training Ratings (ATRs) on the existing commercial pilot license of such training pilots as per the syllabus/course approved by DGCA. It is registered in the State of U.P. with Goods and Service Tax Department.
3. DGCA comes under Ministry of Civil Aviation, Government of India and it is a regulatory body in field of civil aviation. Regulations for civil aviation are in form of Aircraft Act, 1934 and Aircraft Rules, 1937. Section 5-A of the Act read with Rule 133-A empowers DGCA to issue Civil Aviation Requirement (hereinafter referred as ‘CAR’) which regulates the field of civil aviation. It provides for general requirement and quantum of training applicable to different types of aeroplanes including A-320.
4. For extension of aircraft training ratings, a pilot is required to make an application to DGCA for an endorsement in respect of his license. Pilots are required to pass examination and skill test on completion of training with ATO for extension of ATR in their commercial pilot license.
5. For supplying ATR training, petitioner enters into flight training service agreement with its trainees. A prescribed fees is charged which is paid by trainee to petitioner for the training programme. After completing the training, pilots have to undertake skill test and checks at training facility under supervision of designated examiner and, thereafter, they file an application for extension of ATR to DGCA. Pilots are given course completion certificate which is a proof of training undertaken by pilots under approved ATO for obtaining extension of ATRs on the existing license. Notification No. 12 of 2017 was issued in respect of exemption of levy of goods and service tax at Serial No. 66(a), the service provided by an educational institution to students, faculty and staff was exempted. Corresponding exemption notification under UPGST is also similarly worded. A circular was issued on 01.01.2019 being Circular 85/04/2019-GST clarifying that all services provided by an educational institution to its students, faculty and staff are exempted under notification dated 28.06.2017 being Notification No. 12 of 2017.
6. Petitioner made an application for advance ruling on 01.09.2022 under Section 97 of CGST Act, 2017 read with UPGST Act, 2017 before the authority for advance ruling and sought advance ruling on the following question:-
“Whether the supply of education and training services to commercial pilots in accordance with the training curriculum approved by the Directorate General of Civil Aviation for obtaining the extension of Aircraft Type Ratings on their existing licenses would be covered under Serial No. 66(a) of the Notification No. 12/2017 and Serial No. 66 (a) of the Notification dated 30.6.2017, and thereby, exempted from levy of CGST and UPGST.”
7. Reliance was placed on a decision rendered by Delhi High Court in case of Indian Institute of Aircraft Engineering v. Union of India STT 77 (Delhi)/2013 (30) S.T.R. 689 (Delhi) and decision of Division Bench of this Court in case of Commissioner of Central Excise, Customs & Service Tax v. Garg Aviations Ltd. , GST 188 (Allahabad).
8. Respondent no. 3 passed an order on 02.12.2022. Aggrieved by order passed by Advance Ruling Authority, petitioner filed an appeal before respondent no. 2 under Section 100 of CGST Act read with UPGST Act. By order impugned, the appeal has been dismissed. Hence, the present writ petition.
9. Sri Atul Gupta, counsel for petitioner has strongly relied upon the decision rendered by Delhi High Court in case of Indian Institute of Aircraft Engineering (
supra) and judgment of Division Bench rendered in case of
Garg Aviations Ltd. (
supra). He has also relied upon decision of Central Excise and Service Tax Appellate Tribunal, South Bench, Chennai rendered in case of
Orient Flight School v.
Commissioner of GST and Central Excise (Chennai – CESTAT)/(2023) 13 Centax 307 and also upon decision of Apex Court rendered in case of
Suchitra Components Ltd. v.
Commissioner of Central Excise [2008] 12 STT 25 (SC)/2008 (11) S.T.R. 430 as well as decision of Kerala High Court rendered in case of
Manappuram Finance Ltd. v.
Assistant Commissioner of C.T. & Ex.[2023] 96 GST 69/69 GSTL 141 (Kerala).
10. According to petitioner counsel, the word “qualification” occurring at Serial No. 66(a) of notification no. 12, according to dictionary meaning, means “act of qualifying, or condition of being qualified”. Further, according to him, qualification also denotes the act of modifying or changing the strength of some idea. The word ‘qualification’ could not be confined to the degree being awarded by an Institution after education is imparted.
11. Lastly, he has placed reliance upon clarifactory circular issued by Ministry of Finance, Government of India, Department of Revenue on 11.10.2024 which clarifies as to the applicability of GST on DGCA approved flight training courses conducted by flight training organisation. The relevant part of circular dated 11.10.2024 is extracted hereasunder:-
“4. Applicability of GST on the Directorate General of Civil Aviation (DGCA) approved flying training courses conducted by Flying Training Organizations approved by the DGCA:
4.1 Representations have been received regarding the applicability of GST on the DGCA-approved flying training courses conducted by Flying Training Organizations (FTOs) which are approved by the Directorate General of Civil Aviation (DGCA). The same has been examined.
4.2 Under GST Law, vide Sl. No. 66 of the notification No.12/2017- Central Tax (Rate) dated 28.06.2017, services provided by educational institutions to its students, faculty and staff are exempt from levy of GST. In the above notification, “educational institution” has been defined to mean an institution providing services by way of education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.
4.3 In exercise of the power vested by Section 5 of the Aircraft Act, 1934, the Central Government has made the Aircraft Rules, 1937, which, inter-alia, provide for ‘approved training’, i.e. training the curriculum of which has been approved by the DGCA, and ‘approved training organization’, i.e. a flying training organization which shall obtain the approval of DGCA before the students are enrolled to acquire flying experience. The said rules further state that flying experience required for the issue of private pilot and commercial pilot licenses shall be acquired at the Flying Training Organization (FTO) approved/recognized by the DGCA. The Civil Aviation Requirements (CAR) issued under the said rules also provide for a completion certificate to be issued by an approved FTO to each student who completes its approved course of training.
4.4 It is evident from the above that the DGCA not only approves FTOs but also flying training courses and mandates the requirement of course completion certificates to be issued to successful candidates in terms of the Aircraft Act, 1934 and the rules prescribed thereunder. Therefore, the approved flying training courses conducted by FTOs approved by DGCA, wherein the DGCA mandates the requirement of a completion certificate, are covered under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and are hence, exempt.”
12. Sri Gupta submitted that in view of Circular 4.4, it is evidently clear that approved flight training course which are conducted by institutions like petitioner are covered under Serial No. 66 of Notification No. 12/2017-Central Tax dated 28.06.2017 and are exempted from GST.
13. Sri Anoop Trivedi, learned Additional Advocate General and Sri Arvind Kumar Mishra, learned Standing Counsel representing the State have not disputed the circular issued by Ministry of Finance, Department of Revenue and submitted that the matter may be remitted back to respondent no. 3 i.e. Authority for Advance Ruling for considering the matter afresh in light of the circular so issued.
14. Sri Parv Agarwal, learned counsel for respondent no. 1 and 4 does not oppose the proposal made by State counsel and submitted that after clarification made by Finance Ministry, Department of Revenue on 11.10.2024, the matter needs to be adjudicated in the light of it.
15. I have heard respective counsel for the parties and perused the material on record.
16. The short controversy engaging the attention of the Court is as to whether petitioner which is an Approved Training Organisation of DGCA and is imparting training to commercial pilots for extension of Aircraft Training Ratings is entitled to the exemption as provided under Circular 66(a) of the notification dated 28.06.2017 being Notification No. 12/2017-Central Tax.
17. The Authority for Advance Ruling had denied the benefit on the ground that petitioner is not covered under definition of ‘educational institution’ as given in notification no. 12 of 2017 at Serial No. 66(a). After the issuance of clarification by Ministry of Finance, Department of Revenue on 11.10.2024, the approved flight training courses conducted by FTOs approved by DGCA, wherein DGCA mandates the requirement of a completion certificate are covered under Serial No. 66 of Notification No. 12 of 2017 and are exempted from applicability of GST. The issuance of circular clarifies the position of the Notification No. 12 of 2017 from the date of its issuance i.e. 28.06.2017.
18. Thus, it has become imperative on the part of respondent no. 3 to adjudicate the matter afresh in the light of circular dated 11.10.2024 issued by Ministry of Finance, Department of Revenue and decide the question posed by petitioner.
19. Considering the facts and circumstances of the case, the order dated 02.12.2022 passed by respondent no. 3 and order dated 31.05.2023 passed by respondent no. 2 are hereby set aside.
20. The matter is remitted back to respondent no. 3 i.e. Authority for Advance Ruling for Goods and Service Tax, U.P. for reconsidering the question posed by petitioner in its application dated 01.09.2022 in light of circular dated 11.10.2024, within a period of three months, from the date of production of certified copy of this order.
21. Writ petition stands partly allowed.