Income received from Admission cancellation - Educational Institute

[Rohit K]

Sir,

Need a clarification on the following.

There is an education society which is registered Under Section 12AA of Income tax act.

The institution is receiving regular income from admission cancellation. And also getting income from Hostel fine (Other than hostel fees) from Students staying in hostel.

Since there is no relation established in the educational institute and Student after admission cancellation, Whether the income received is taxable and can it be seen as tolerating an act/refraining from an act as per schedule I of CGST act.

AI Summary

GST treatment of admission cancellation fees: may be non-taxable as liquidated damages or treated as a service.
Whether admission cancellation fees and hostel fines are taxable under GST depends on characterization: if they are liquidated damages (compensatory/penal), they are not supplies and thus not taxable, particularly where the society's main educational services are exempt; alternatively, they may be viewed as services to the student or as receipts occurring absent a student relationship, which could attract GST. The tax treatment therefore turns on factual contract terms, exemption coverage of core activities, and the legal characterisation of the receipts.