Affiliation fees remain taxable where GST exemption for admission and examinations does not cover university affiliation services.

Affiliation-related fees collected by a university formed a single composite supply, with affiliation as the principal supply, because the application, scrutiny, inspection and grant of affiliation were naturally bundled in the ordinary course of the affiliation process. The GST exemption for services relating to admission to, or conduct of examination by, an educational institution did not extend to affiliation services, as affiliation is distinct from student admission or examination conduct. The amendment removing the words "upto higher secondary" did not widen the entry to cover affiliation. Accordingly, affiliation-related fees were held taxable and the exemption claim failed.

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Issues: Whether the composite supply consisting of application form fees, application fees, inspection fees, affiliation fees, fees for additional section, initial affiliation fee, permanent affiliation fee, continuation of affiliation fee, increase in intake processing fee, and penal fee for late application, collected by the University in connection with affiliation of its constituent colleges, is exempt under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended by Notification No. 02/2018-Central Tax (Rate) dated 25.01.2018.

Analysis: The fees were held to arise from a single composite supply, with affiliation as the principal supply, because the application, scrutiny, inspection, and grant of affiliation were naturally bundled in the ordinary course of the University's affiliation process. The exemption under Sl. No. 66(b)(iv) applies only to services relating to admission to, or conduct of examination by, an educational institution. On the statutory and regulatory framework governing affiliation, the activity of affiliation was found to be distinct from admission of students to a course or conduct of examination for such admission. The amendment removing the words "upto higher secondary" did not expand the entry to cover affiliation services.

Conclusion: The composite supply connected with affiliation is not exempt under Sl. No. 66 of Notification No. 12/2017-Central Tax (Rate), as amended.

Final Conclusion: The exemption claim failed, and the affiliation-related fees were held taxable under GST.

Ratio Decidendi: An exemption for services relating to admission to, or conduct of examination by, an educational institution does not extend to affiliation services that merely enable the institution to conduct courses and obtain university privileges.

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