TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Affiliation and Recognition Fees Are Not Subject to Service Tax Under Current GST Rules</h1> The CESTAT New Delhi held that the appellant's collection of Affiliation/Recognition Fees does not attract service tax as the activity is non-commercial ... Recovery of service tax with interest and penalty - appellant was collecting Affiliation Fee/Recognition Fees on which they had not discharged service tax - HELD THAT:- The issue is no longer res-integra and has been decided by this Tribunal in GOA UNIVERSITY, THROUGH ITS REGISTRAR, MR. VISHNU SAKHARAM NADKARNI, VERSUS JOINT COMMISSIONER OF CENTRAL GOODS AND SERVICE TAX, GOA COMMISSIONERATE, CENTRAL BOARD OF INDIRECT TAXES & CUSTOMS, GOODS AND SERVICES TAX COUNCIL, GST COUNCIL, DELHI. [2025 (4) TMI 1056 - BOMBAY HIGH COURT] and M/S JIWAJI VISHWAVIDHYALAYA VERSUS COMMISSIONER, CENTRAL GOODS & SERVICE TAX, & CENTRAL EXCISE, BHOPAL [2025 (5) TMI 153 - CESTAT NEW DELHI] where it was held that the activities of the petitioner University not being commercial in nature, are not amenable to GST. There is a complete absence of jurisdictional facts to issue the impugned show cause notice. There are no merit in the impugned order - appeal allowed. ISSUES: Whether income received by a statutory university from granting affiliation and recognition fees to colleges constitutes a taxable 'service' under the Finance Act, 1994 (Service Tax law).Whether the activity of granting affiliation/recognition by a statutory university involves 'activity carried out by a person for another for consideration' as defined under clause (44) of Section 65B of the Finance Act, 1994.Whether penalties and interest under Sections 75, 77, and 78 of the Finance Act, 1994 can be imposed for non-payment of service tax on affiliation fees collected by a statutory university.Whether the extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 is invokable for recovery of service tax on affiliation fees. RULINGS / HOLDINGS: The income from affiliation and recognition fees collected by a statutory university does not constitute a taxable 'service' under the Finance Act, 1994, as the activity is not an 'activity carried out by a person for another for consideration' within the meaning of clause (44) of Section 65B.The act of granting affiliation/recognition is a statutory/public duty discharged under law without commercial elements and does not satisfy the 'activity for consideration' requirement essential for service tax liability.Penalties and interest under Sections 75, 77, and 78 of the Finance Act, 1994 cannot be imposed for non-payment of service tax on such affiliation fees, as the underlying demand for service tax is not sustainable.The extended period of limitation under proviso to Section 73(1) of the Finance Act, 1994 is not applicable since the foundational tax demand is unsustainable. RATIONALE: The Court applied the definition of 'service' under clause (44) of Section 65B of the Finance Act, 1994, which requires an 'activity carried out by a person for another for consideration.' The term 'consideration' was interpreted with reference to Section 2(d) of the Indian Contract Act, 1872, emphasizing the necessity of a quid pro quo contractual relationship.It was held that statutory functions performed by a university under a special State Act, such as granting affiliation or recognition, are public law duties lacking commercial elements and do not constitute activities 'for consideration' as required for service tax liability.Precedents from various tribunals and High Courts, including a detailed analysis by the Hon'ble Karnataka High Court in Rajiv Gandhi University of Health Sciences case, were relied upon to reject the taxability of affiliation fees.The Court noted the dismissal of the Special Leave Petition by the Supreme Court against the Karnataka High Court's ruling, reinforcing the settled position that such statutory functions are outside the service tax net.There was no dissenting opinion or doctrinal shift; the judgment reaffirmed established legal principles distinguishing sovereign/statutory functions from taxable services under the Finance Act.
TaxTMI 
TaxTMI 
