GST payable on university affiliation services; exemption under Entry 66(b)(iv) Notification 12/2017-CT (Rate) not applicable

HC held that services rendered by the respondent universities to their constituent self-financing and management colleges towards affiliation are not exempt from GST under Entry 66(b)(iv) of Notification No.12/2017-CT (Rate), as amended by Notification No.2/2018-CT. The court ruled that the exemption is strictly confined to services relating to admission to, or conduct of examinations by, educational institutions, and cannot be extended to affiliation activities. Applying strict interpretation of exemption notifications as mandated by SC precedent, HC rejected the contention that affiliation services fall within the exemption. The writ petitions were dismissed, confirming GST liability on affiliation services.

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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.

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