TaxTMI 
TaxTMI 
2025 (12) TMI 558
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.... by Resolution No. 209 dated 27.02.1962 with the primary objective of standardizing education across India and in some cases, to educational institutes outside India. For this purpose, the appellant conducts examination for secondary and senior secondary stages of education. 3. The appellant further claims that any educational institution that wishes to prepare students for examinations conducted by the appellant, is required to meet certain standards of education laid down by the appellant through its "Affiliation Bye-Laws of the Central Board of Secondary Education". Some of the requirements are: (a) Necessary qualifications required for teachers of various posts/subjects and conduct of training programme for them; (b) Minimum land requirement for the schools; (c) Infrastructural facilities for class-rooms, science laboratories, computer laboratories, and rooms for extra-curricular activities; (d) Fee for students; (e) Manner of conducting examination; and (f) Prescription of course curriculum. 4. Upon meeting such standards, the schools can be considered for affiliation with the appellant, and the students at such affil....
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....mption Notification; and (v) The extended period of limitation could not have been invoked. 8. The show cause notice was adjudicated by the order dated 11.10.2021 passed by the Additional Director. The demand was confirmed after extending cum-tax benefit. The findings recorded in the order are: (i) The appellant is providing the service of affiliation to schools and in return, is receiving consideration in the form of Affiliation Fee. The activity and consideration are clearly identifiable in this transaction; (ii) The appellant is not a department of the Central Government or State Government and, therefore, does not qualify to be a Government. Thus, the service provided by the appellant is not covered under section 66D(a) of the Finance Act for the period prior as well as after 14.05.2015; (iii) "Services by way of education" means services imparted by an educational institution to students, faculty and staff, which is not akin to service of providing affiliation to educational institutions. Thus, service of affiliation is not covered under section 66D(1) of the Finance Act; (iv) Exemption under Entry 9 of the Exemption Notification....
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....titution enrolled with the appellant Board. No activity was undertaken by the appellant for the schools. There was no underlying service being given by the appellant to the educational institutions. Rather, the schools were required to demonstrate their qualification to the standard of education of the appellant to be affiliated with the appellant. Thus, in the absence of any "activity" being carried out by the appellant for the schools, service tax cannot be levied. In this connection reliance has been placed on the judgment of the Karnataka High Court in Principal Additional Director General and Ors. vs. Rajiv Gandhi University of Health Sciences, Karnataka [Writ Appeal No. 856 of 2022 decided on 30.07.2024]. It was held that the act of affiliation only creates an umbilical cord between affiliating body and affiliated entity and does not fall within the domain of an "activity done for consideration". With such understanding, demand of service tax on "Affiliation Fee" was set aside; (iv) The aforementioned judgment of the Karnataka High Court has been relied upon in the following decisions: (a) Devi Ahilya Vishwavidhyalaya (University) vs. Commissioner, Central G....
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....oked in the facts and circumstances of the case. 10. Shri S.K. Meena, learned authorized representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference. 11. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 12. The issue that arises for consideration in this appeal is whether the demand of service tax on Affiliation Fee paid by the schools to the appellant for issuance of affiliation certificate is justified. The period involved in this appeal is from July, 2012 to June, 2017. 13. The contention of the learned counsel for the appellant is that affiliation of schools to the appellant would not amount to any service and in the absence of a service having been provided, the amount collected as Affiliation Fee cannot be subjected to levy of service tax. Learned counsel explained that for certifying the schools as affiliated to the appellant, the appellant collected an amount towards Affiliation Fee. This fee collected by the appellant is only for enrolment of the educational institutions wit....
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....) of section 66F of the Finance Act, 1994, either. The interests/fines/penalties leviable on account of default also have a thick connect with the fees regularly leviable and therefore, they would partake the character of fees only. In view of all this, the Revenue is not justified in levying Service Tax on the income accruing to the University on account of affiliation during the academic year between 2012-13 and 2016-17. The periodicity of collection of affiliation related fees pales into insignificance." (emphasis supplied) 15. The Gujarat High Court in Sahitya Mudranalaya Pvt. Ltd. vs. Additional Director General [2021 (46) G.S.T.L. 245 (Guj.)] also observed: "13.14 The scope and ambit of the expression "educational institution" as defined under clause (oa) of the Mega Exemption Notification requires to be examined. Furthermore, it is required to be ascertained as to whether the services provided by the petitioners to the Boards/University fall within the ambit of clause (l) of Section 66D of the Finance Act. Under clause (oa) of the Mega Exemption Notification, "educational institution" is defined to mean an institution providing services by way of : (i) Pre-sch....
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....n would not be complete. Therefore, examinations are an indispensable component of education, without which such education is incomplete. Therefore, to say that Boards/Universities are not "educational institutions" would amount to divorcing examinations from education. 13.23 Clause (l) of Section 66D of the Finance Act may be examined in the light of the above. Sub-clause (i) of clause (l) refers to pre-school education and education up to higher secondary school or equivalent. When the sub-clause says education up to higher secondary school or equivalent, it goes without saying that it includes the examination leading to conferment of a certificate of having passed the higher secondary school or equivalent. Similarly when sub-clause (ii) says education as a part of the curriculum for obtaining a qualification recognized by any law for the time being in force, it is apparent that the Legislature meant the entire process of preparation of curriculum to the holding of examination leading to obtaining of a qualification recognized by any law for the time being in force. If the contribution of the Boards/Universities is excluded, there would be no curriculum for obtaining a q....
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....onal institution". The Gujarat High Court further held that the preparation of curriculum and holding of examinations is not excluded under section 66D(l) of the Finance Act. 17. The same view was taken by the Tribunal in Barkatullah University and the observations are: "6. Universities, including the appellant, allow colleges and institutions to affiliate to them and for this purpose, they charge an affiliation fee. The impugned order held that the appellant was liable to pay service tax on this fees as this service was not covered under the negative list under section 66D (l) of the Act. 7. Learned counsel for the appellant submits that affiliation fees charged by the universities falls under the negative list of services under section 66D(l) of the Act as held by the Madras High Court in Madurai Kamraj University versus Jt. Commissioner of GST & C Ex, Madurai [2021 (54) GSTL 385 (Mad.)] the relevant portion of which is as follows: "26. In the result, the impugned order is liable to be set aside as the petitioner educational institution i.e., the university cannot be assessed for demanding any service tax for the services of education provided by the....