"We have system wide proxy for all repos and this is critical for us so we can use the module. Disable proxy for yum repo as it will not pass through to Puppet Server and will not hand over the certs."
It's possible to configure yum with a proxy. That proxy may not work for communication with Puppet Server, since it uses its own SSL. It should be possible to disable the proxy for the yum repo so it can communicate with Puppet Server.