2023 (11) TMI 1053 - HC - GST

University affiliation services don't qualify for GST exemption under Entry 66, only examination conduct services exempt

M/s. Sree Ramu College of Arts and Science, (Affiliated to Bharathiar University), Represented by its Secretary R. Nithyanandam, M/s. Texcity Arts and Science College, (Affiliated to Bharathiar University), Represented by its Secretary, A.M.M. Khaleel) Versus Authority for Clarification and Advance Ruling, Tamilnadu, The Commissioner of Central Tax & GST, The Assistant Commissioner, Bharathiar University And The Tamil Nadu Dr. MGR Medical University Versus Joint Commissioner, Office of the Commissioner of GST & Central Excise And Pondicherry University, Represented by its Registrar (in charge) Versus The Assistant Commissioner GST & Central Excise, Puducherry Division III

The HC dismissed petitions challenging GST exemption for university affiliation services. Two colleges affiliated to Bharathiyar University sought ... Exemption from GST - activity of affiliation - two colleges affiliated to Bharathiyar University, Coimbatore - whether the services provided by it to its constituent colleges such as the petitioners viz., self-financing and Management Colleges, were exempted from GST vide Entry 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017, or not - HELD THAT:- There is no ambiguity in the language in Entry b (iv) to Entry 66 to Notification No.12/2017 – CT (Rate) dated 28.06.2017 as amended by Notification No.2/2018-CT dated 25.01.2018. Entry b (iv) to Entry 66 to Notification No.12/2017 – CT (Rate) dated 28.06.2017 as amended by Notification No.2/2018-CT dated 25.01.2018 is applicable only for services relating to examination or conduct of examination by petitioner colleges in W.P.No.11038 of 2022 & W.P.No.5967 of 2023 and not to work relating to affiliation. The Hon’ble Supreme Court has repeatedly held that the operation of the notification has to be judged not by the object which the rule making authority had in mind but the express words it has employed effectuate the legislative intent. In UNION OF INDIA VERSUS WOOD PAPERS LTD. [1990 (4) TMI 55 - SUPREME COURT], the Hon’ble Supreme Court held that at the stage of applicability, the Notification has to be construed strictly and the ambit should not be widened or extended. It further held that only once that stage is crossed, the notification should be construed liberally that is other technicalities and procedural compliances should not come in the way of extending the benefit. The service of admission or conduct of examination cannot be equated on par with service provided to the petitioners in W.P.No.11038 of 2022 and W.P.No.5967 of 2023 by Bharathiar University. Similarly, service provided by the respective Universities are also exempted. By no stretch of imagination, there is any scope for drawing an inference that service provided by the Bharathiyar University or Pondicherry University or the Tamil Nadu Dr.MGR Medical University to their constituent colleges can be construed be exempted under Entry 9 to Notification No.12/2017-CT (Rate) dated 28.06.2017. It is therefore held that Entry (b) (iv) to Entry 66 to Notification No.12/2017 – CT (Rate) dated 28.06.2017 as amended by Notification No.2/2018-CT dated 25.01.2018 is confined only to services relating to admission to, or conduct of examination by educational institution and not to services relating to affiliation of constituent colleges. Petition dismissed. Issues Involved:1. Validity of the impugned order dated 19.11.2020 by the Authority for Clarification and Advance Ruling (ACAR).2. Challenge to Show Cause Notice No.04/2022-GST(JC) dated 28.06.2022.3. Challenge to Order in Original No.01/2022 (GST) dated 05.05.2022.4. Applicability of GST exemption under Entry 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017.Summary:1. Validity of the Impugned Order dated 19.11.2020 by ACAR:The petitioners in W.P.Nos.11038 of 2022 & 5967 of 2023 challenged the impugned order dated 19.11.2020 passed by the Authority for Clarification and Advance Ruling (ACAR) under Section 97 of CGST Act, 2017. The ruling concluded that various fees collected by Bharathiar University for affiliation-related services are not exempted from GST as per Notification No.12/2017-CT (Rate) dated 28.06.2017. The court held that the services provided by Bharathiar University to the petitioners were not exempted from GST under the said notification, as the exemption is confined to services related to admission or conduct of examinations by educational institutions up to higher secondary school or equivalent.2. Challenge to Show Cause Notice No.04/2022-GST(JC) dated 28.06.2022:The petitioner in W.P.No.27092 of 2022 challenged the Show Cause Notice issued by the respondent. The court held that the challenge is premature and dismissed the petition, stating that the petitioner must file an appropriate reply to the Show Cause Notice within 30 days of receipt of the order.3. Challenge to Order in Original No.01/2022 (GST) dated 05.05.2022:The petitioner in W.P.No.24261 of 2022 challenged the Order in Original dated 05.05.2022. The court dismissed the petition, granting the petitioner liberty to file a statutory appeal before the Appellate Authority under Section 107 of the GST Act, 2017 within 30 days of receipt of the order.4. Applicability of GST Exemption under Entry 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017:The court examined the applicability of GST exemption under Entry 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017. It was held that the exemption is applicable only to services provided to educational institutions by way of pre-school education and education up to higher secondary school or equivalent. The court noted that the language of the notification is clear and does not extend to services related to affiliation of colleges. Therefore, the services provided by Bharathiar University to the petitioners are not exempted from GST.Conclusion:The court dismissed W.P.Nos.11038 of 2022 & 5967 of 2023, holding that the services provided by Bharathiar University to the petitioners are not exempted from GST. W.P.No.27092 of 2022 was dismissed with liberty to file a reply to the Show Cause Notice, and W.P.No.24261 of 2022 was dismissed with liberty to file an appeal before the Appellate Authority. The connected Miscellaneous Petitions were closed, and no costs were awarded.