The Allahabad High Court ruled in favor of CAE Simulation Training Pvt. Ltd., a DGCA-approved training organization, exempting it from GST under Notification No. 12/2017. The petitioner conducts aircraft type rating training for commercial pilots, which is part of a curriculum approved by the DGCA. CAE Simulation Training Pvt. Ltd. sought GST exemption, arguing that it qualifies as an educational institution providing legally recognized qualifications. However, both the Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) denied the exemption, stating the petitioner did not fit the definition of an educational institution as per the notification.
The petitioner referenced past court decisions and a clarificatory circular from the Ministry of Finance, which stated that DGCA-approved flight training courses are covered under the exemption notification. The High Court noted the Ministry's circular explicitly clarified that such courses are exempt from GST, as they fall within the specified notification. The court criticized the AAR and AAAR for not considering this clarification, deeming their decisions unsustainable.
Consequently, the High Court set aside the previous orders from AAR and AAAR and remanded the case back to the Authority for Advance Ruling in Uttar Pradesh. The court instructed them to reconsider the petitioner's application, taking into account the Ministry's circular, within three months from receiving the order.
Order Date: 9 October 2025
Case Title: CAE Simulation Training Pvt. Ltd. v. Commissioner of CGST, Greater Noida & Ors.
Facts:
- The petitioner, CAE Simulation Training Pvt. Ltd., a DGCA-approved Approved Training Organisation (ATO), conducts aircraft type rating (ATR) training for commercial pilots as part of the syllabus approved by DGCA under the Aircraft Act, 1934 and Rules, 1937.
- The petitioner sought exemption from GST under Notification No. 12/2017 – Central Tax (Rate), Sl. No. 66(a), claiming to be an educational institution providing education as part of a curriculum for obtaining a qualification recognized by law.
- The Authority for Advance Ruling (AAR) and the Appellate Authority for Advance Ruling (AAAR) rejected the exemption plea, holding that the petitioner was not an “educational institution” as defined in the notification.
- The petitioner relied on precedents including Indian Institute of Aircraft Engineering v. Union of India (Delhi HC, 2013) and Garg Aviations Ltd. v. CCE (Allahabad HC, 2014), and a clarificatory circular issued by the Ministry of Finance (Department of Revenue) dated 11.10.2024, clarifying that DGCA-approved flying training courses conducted by approved Flying Training Organisations (FTOs) are covered under the exemption notification.
Issue:
- Whether DGCA-approved flight training courses conducted by approved Flying Training Organisations are exempt from GST under Notification No. 12/2017-Central Tax (Rate)?
Order:
- The Court observed that the Finance Ministry’s Circular dated 11.10.2024 explicitly clarified that DGCA-approved flight training courses, where completion certificates are mandated by DGCA, fall within Sl. No. 66 of Notification No. 12/2017, and are exempt from GST.
- The circular, issued under statutory authority, was held to be clarificatory in nature and hence applicable retrospectively from the date of the notification (28.06.2017).
- The Court found that the AAR and AAAR failed to consider this clarification and therefore, their orders were unsustainable.
- Accordingly, both orders dated 02.12.2022 (AAR) and 31.05.2023 (AAAR) were set aside.
- The matter was remanded to the Authority for Advance Ruling (U.P.) to reconsider the petitioner’s application dated 01.09.2022 afresh, in light of the circular dated 11.10.2024, within three months from receipt of the order.
