Statutory university affiliation fees are not taxable GST supplies when collected through regulatory and educational functions.

A statutory university's collection of affiliation fees in discharge of regulatory and educational functions is not a supply made in the course or furtherance of business under the GST framework. Because the activity arises from university legislation and is aimed at affiliation, inspection, regulation of colleges, and maintenance of educational standards, it is treated as non-commercial and outside the ordinary meaning of trade, commerce, or business. On that basis, Section 7 of the CGST Act is not attracted and the charging provision under Section 9 cannot be invoked, so the GST demand, show cause notice, and connected order are unsustainable.

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Issues: Whether collection of affiliation fees by a statutory university amounts to a supply of service taxable under the GST laws, and whether the impugned GST levy and demand on such fees could be sustained.

Analysis: The university's power to grant affiliation arises from the State university legislation and is exercised in discharge of statutory duties connected with dissemination of education, regulation of colleges, inspection of infrastructure, and maintenance of educational standards. Such activity is not commercial in character and does not fall within the ordinary meaning of trade, commerce, or business under the GST framework. Since Section 7 of the Central Goods and Services Tax Act, 2017 applies only to supplies made for consideration in the course or furtherance of business, affiliation fees collected in performance of statutory functions do not answer that description. Once the activity itself is not a supply, the charging provision under Section 9 of the Central Goods and Services Tax Act, 2017 cannot be invoked, and the proper officer lacked jurisdiction to issue the show cause notice and confirm the demand. The view is reinforced by the purposive understanding of education-related exemption and by the persuasive value of earlier decisions holding affiliation-related receipts of universities to be statutory and regulatory, not commercial.

Conclusion: Collection of affiliation fees by the university is not a taxable supply, the GST demand is unsustainable, and the impugned order-in-original could not be maintained.

Final Conclusion: The petition succeeds and the impugned demand order and connected summary order are quashed.

Ratio Decidendi: A statutory university's collection of affiliation fees in discharge of regulatory and educational functions is not a supply made in the course or furtherance of business, and therefore falls outside the GST charging scheme.

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