GOVERNMENT OF INDIA
Ministry of: Defence

DEPARTMENT OF: EX-SERVICEMEN`S WELFARE
RAJYA SABHA
UNSTARRED QUESTION NO 2588
TO BE ANSWERED ON 22.12.2015
Scheme for re skilling ex-servicemen

2588. Shri Rajeev Chandrasekhar

Will the Minister of DEFENCE be pleased to state:-

(a) whether Government has undertaken any scheme to re-skill the ex-servicemen/ veterans to ensure their absorption into the job market after their retirement, if so, the details thereof;

(b) if not, the reasons therefor;

(c) whether Government has plans to collaborate with the private sector in re-skilling the veterans;

(d) if so, how many private enterprises have partnered with Directorate General Resettlement for the same; and

(e) whether Government is planning to provide tax exemptions for private companies engaged in re-skilling and employing veterans / ex-servicemen?

Answer
MINISTER OF STATE IN THE MINISTRY OF DEFENCE
(RAO INDERJIT SINGH)

(a) Yes, Sir. An Memorandum of Undertaking (MoU) between Ministry of Defence and Ministry of Skill Development Entrepreneurship has been signed. One of the goals of this MoU is to successfully roll out National Skill Qualified Framework (NSQF) compliant skill training to Ex-Servicemen and to train and provide gainful employment to Ex-Servicemen and their dependents in the next five years with private sector collaboration as well. The MoU is currently at the implementation stage.

(b) Does not arise.

(c) Yes, Sir.

(d) Yes, Sir. Directorate General of Resettlement (DGR) has partnered with Confederation of Indian Industry (CII) for resettlement of Ex-Servicemen. DGR is also partnering with various Sector Skill Councils under NSDC for re-skilling the veterans.
(e) There are already certain tax exemptions under Service Tax and Income Tax for private companies engaged in skill development. Details are enclosed as Appendix “A”.

APPENDIX-‘A’ IN RESPECT OF REPLY GIVEN IN PART 9e) OF RAJYA SABHA UNSTARRED QUESTION NO. 2588 FOR 22.12.2015 REGARDING SCHEME FOR RE-SKILLING EX-SERVICEMEN

TAX BENEFITS UNDER SKILL DEVELOPMENT

1.    Service Tax Benefits:

As per the provisions of the Service Tax notifications, currently following categories of services are exempt from the service tax:

  1. Vocational Educational/training/skill development courses (VEC) offered by any institution set up by the Government of India, any State Government or any local authority.
  2. Regardless of the institution offering it, VEC which leads to a “qualification recognized by law”. This would include the certificate, diploma, degree or any other similar certificate, which is approved or recognized by any entity established under a Central or State law including delegated legislation.
  3. Any services provided by: 
  1. The National Skill Development Corporation (NSDC) set up by the Government of India
  2. A Sector Skill Council (SSC) approved by the National Skill Development Corporation
  3. An assessment agency approved by the Sector Skill Council or National Skill Development Corporation
  4. A training partner approved by the National Skill Development Corporation or the Sector Skill Council

2.    Section 35 CCD of Income Tax Act, 1961:

Under Section 35 CCD of the Income Tax Act a company can avail benefits of weighted tax deductions of 150 percent of the expenses (other than land or building) incurred on the skill development projects. The National Skill Development Agency (NSDA) has been mandated to process applications and to send its recommendations to Income Tax authorities for necessary actions.

Eligibility:

Training Institute which are eligible to claim benefit under Section 35 CCD of income tax as defined in the guidelines is:

The definition of “Training Institute” as per the rule 6AAH(ii) of the IT Riles is:

“Training Institute means a training institute set up by the Central or State Government or a local authority or a training institute affiliated to National Council for Vocational Training or State Council for Vocational Training”.

This was later amended to include NSDA approved training institute also to be eligible under section 35 CCD apart from NCVT and SCVT.