State Skill Development Authority Not Eligible for GST Exemption on Fee Share | AAR

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  • Last Updated on 9 December, 2025

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GST exemption for state skill development

Case Details: Kerala Academy for Skills Excellence, In re - [2025] 180 taxmann.com 830 (AAR-KERALA)

Judiciary and Counsel Details

  • Jomy Jacob & Mansur M.I., Member
  • Udayan C.C., Finance Officer for the Applicant.

Facts of the Case

The applicant, a government entity designated as the State Skill Development Mission under the National Skill Development Schemes, sought an advance ruling on GST applicability. Specifically, the applicant inquired about the tax treatment of the share of fees received from its skill training partners and fees collected directly from students enrolled in its own training institutes. The applicant submitted that its training partners were not approved for the relevant schemes and that its own institutes lacked proof of approved curriculum. The matter was accordingly placed before the AAR.

AAR Held

The AAR held that the share of fees received by the applicant from its skill training partners did not qualify for exemption. Fees collected directly from students by the applicant’s own institutes were also taxable. It was further held that the source of funds, including government grants, does not restrict eligibility for input tax credit (ITC), and ITC cannot be denied solely because expenditure was incurred using grant funds, provided inputs are directly attributable to taxable outward supplies.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied