TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 197
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....artments faced acute shortage of doctors, nurses and paramedical staff because of mass availing of LWA for private employment both inside the county and abroad. The rates so fixed were Rs. 50,000/- to the category of Asst. Professor above and Rs. 15,000/- for Lectures & Non-teaching staff. 4.2 As per Order No. GO (MS) NO.191/2023 H&FWD dated 05/08/2023, the fees for departmental inspection for issuing NOC/EC for starting new self-financing Medical, Nursing, Dental colleges or starting new courses and enhancement of seats for various medical & paramedical courses in self-financing institutions are also enhanced. The applicant wants to know whether GST is available on the above and if so, what are the applicable rates of GST. 5. Comments of the Jurisdictional Officer The application was forwarded to the jurisdictional officer as per provisions of Section 98 (1) of the CGST Act. The Jurisdictional officer reported that no proceedings related to issue raised in the advance ruling application pending in that office. Hence it is construed that no proceedings are pending on the issue against the applicant. 6. Personal Hearing: The applicant was granted an opportunity for a personal h....
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....levy is not intended to provide any service or benefit to the applicant but is part of a regulatory mechanism designed to safeguard public interest. Such a fee, imposed as part of the employer's administrative powers and not with the intent of providing any taxable supply, falls outside the purview of "supply" as defined in Section 7 of the CGST Act, 2017. 7.1.4 The fee in question operates as a deterrent and is in the nature of a policy penalty rather than a contractual or commercial fee. It is not intended to compensate for or to correspond with any service rendered by the department to the employee. The officer seeking LWA does not receive any new right or benefit in return for the payment of the fee; rather, the leave itself continues to be governed by the Kerala Service Rules, and its sanction remains discretionary. The payment does not induce any special accommodation or confer any special entitlement, and therefore lacks the characteristics of a transactional exchange. The absence of reciprocal benefit or enforceable obligation indicates that the fee does not constitute consideration within the meaning of Section 2(31) of the CGST Act. 7.1.5 It is further noted that th....
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....ctual arrangement to tolerate an act. This judicial validation lends strong support to the position that LWA fees, being similar in nature to notice pay or bond recovery, are not subject to GST. 7.1.9 It is concluded that the collection of fees from Medical and Paramedical Officers for availing Leave Without Allowance (LWA) does not amount to a "supply" under Section 7 of the CGST Act, 2017. The act of granting leave arises out of an employer-employee relationship governed by service rules, and the levy of such fees is an administrative measure introduced as part of a broader public policy aimed at deterring indiscriminate availing of LWA, which adversely impacts the delivery of essential public health services. The fee does not involve any provision of goods or services, nor is it collected in the course or furtherance of any business activity. There is no contractual obligation on the part of the applicant to tolerate the act of taking leave, and the payment made by the employee is not in the nature of consideration for any service rendered. As clarified in CBIC Circular No. 178/10/2022-GST dated 03.08.2022, such deterrent or penal recoveries, including forfeiture of bond amount....
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....ction and certification by the DME, are rendered to the institution itself and not to its students or staff. Furthermore, these services are rendered prior to the commencement or expansion of educational activities and thus are not incidental to the imparting of education. Hence, the benefit of exemption under Entry 66 is not available. 7.2.4 CBIC Circular No. 234/28/2024-GST dated 11.10.2024 provides detailed clarification on the taxability of affiliation-related services under GST. The circular considers two distinct scenarios: first, affiliation services provided by universities to affiliated colleges, and second, affiliation services rendered by regulatory bodies such as educational boards or councils to schools. In both cases, the circular concludes that such services are taxable at the standard GST rate of 18%, as they are rendered to business entities in the course or furtherance of business and are not covered by any exemption under Notification No. 12/2017-Central Tax (Rate). An exemption has been carved out only in respect of affiliation services provided to government schools (owned or controlled by government authorities), effective from 10.10.2024. 7.2.5 By parity of....