GST ON INWARD SUPPLIES

[BEENA MANADATH]

Whether GST is applicable on affiliation fee collected by the university from colleges??? if yes what is the applicable rate and when the university need to remit the same?

[KASTURI SETHI]

In the above scenario, the activity of 'affiliation' is a supply of service as per definition of 'service' under Section 2(102) of CGST Act and 'scope of supply under Section 7 of CGST ACT. It is classifiable under Chapter / Heading/Sub-heading no.999799 (Other Services-nowhere else classified) attracting GST @ 18% (9+9) vide Notification No.11/17-CT(R) dated 28.6.17 as amended. No specific exemption is available. Next question is when liability arises i.e. time of supply of service. The liability to pay GST arises either on the date of issue of invoice or the date of receipt of payment, whichever is earlier. A university is not Govt. entity/Authority . Hence no exemption is available.

Pl. go through the following :-

As per Section 2 (102) of CGST Act, 2017 “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged;

SECTION 13. Time of supply of services. - (1) The liability to pay tax on services shall arise at the time of supply, as determined in accordance with the provisions of this section.

(2) The time of supply of services shall be the earliest of the following dates, namely :-

(a) the date of issue of invoice by the supplier, if the invoice is issued within the period prescribed under [* * *] section 31 or the date of receipt of payment, whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period prescribed under [* * *] section 31 or the date of receipt of payment, whichever is earlier; or

(c) the date on which the recipient shows the receipt of services in his books of account, in a case where the provisions of clause (a) or clause (b) do not apply :

SECTION 7. Scope of supply. - (1) For the purposes of this Act, the expression “supply” includes -

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

(b) import of services for a consideration whether or not in the course or furtherance of business; [and]

(c) the activities specified in Schedule I, made or agreed to be made without a consideration; [* * *]

[(d) *   *   *]

[(1A) where certain activities or transactions, constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.]

(2) Notwithstanding anything contained in sub-section (1), -

(a) activities or transactions specified in Schedule III; or

(b) such activities or transactions undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities, as may be notified by the Government on the recommendations of the Council,

shall be treated neither as a supply of goods nor a supply of services.

[KASTURI SETHI]

In continuation of my reply dated 5.2.2021 above, it is added that you have not mentioned the name of university. So I presume that the university is NOT fully established by Govt. (State or Central Govt.). Hence out of definition of Government.

AI Summary

University Affiliation Fees Subject to 18% GST as 'Other Services' Under CGST Act, Sections 2(102), 7, and 13 A query was raised about the applicability of GST on affiliation fees collected by a university from colleges. It was clarified that affiliation is considered a service under the CGST Act, specifically classified under 'Other Services' with an 18% GST rate. The GST liability arises at the earliest of the invoice issuance or payment receipt. Since the university is not a government entity, no exemptions apply. The response highlighted the definitions and provisions under Sections 2(102), 7, and 13 of the CGST Act regarding the scope and timing of supply for services.