TaxTMI 
TaxTMI 
2025 (9) TMI 1782
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....versity. It is aggrieved by the adjudication orders dated 28.11.2023 passed under Section 79(9) of the KGST/CGST Acts, 2017. 3. Learned counsel for the petitioner submits that the issue in the lis stands answered by the judgment rendered by the Co-ordinate Bench in the case of M/s. Bengaluru North University vs. Joint Commissioner of Central Tax and others in W.P.No.4254/2024 and connected matters disposed of on 22.04.2025, wherein it held as under: "10. Before proceeding further, it would be apposite to state that the issues involved in the present petitions stand directly and squarely covered and answered in favour of the petitioners-University in the case of Goa University Vs. Joint Commissioner of Central Goods and Service Tax & Ors W.P. No. 723/2024 dated 15.04.2025, in which all the judgments, circulars, notifications etc., relied upon by the petitioners as well as the respondents were considered and the petition was allowed by the Hon'ble Division Bench of Bombay High Court which upheld the claim of the petitioner and quashed the impugned Show Cause Notices/Orders therein. 11. After having referred to the aforesaid judgment of the Bombay High Court in Go....
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....fied by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-State supplies of which shall be paid by the electr....
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....ociation, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and] (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; 12.1 Section 7(1) of the CGST/KGST Act provides for the scope of supply; it includes all forms of supply of goods and 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. 12.2 On the aspect of the nature of activities carried out by a University, in Goa University's case supra, it was held as under: " 27. The GST is a value added tax....
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....the process of developing and training the powers and capabilities of human beings. In its broadest sense the word comprehends not merely the instructions received at school, or college but the whole course of training Moral, intellectual and physical; is not limited to the ordinary instruction of the child in the pursuits of literature. It also comprehends a proper attention to the moral and religious sentiments of the child. And it is sometimes used as synonymous with "learning". XXXX 84. In 'India-Vision-2020' published by the Planning Commission of India, it is stated (at p. 250): 'Education is an important input both for the growth of the society as well as for the individual. Properly planned educational input can contribute to increase in the gross national products, cultural richness, build positive attitude towards technology and increase efficiency and effectiveness of the governance. Education opens new horizons for an individual, provides new aspirations and develops new values. It strengthens competencies and develops commitment. Education generates in an individual a critical outlook on social and political realities and sharpens the abil....
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....stablished with a purpose of ensuring proper and systematic instruction, teaching, training and research. The fees such as affiliation fees, prospectus fees and migration certificate fees, sports fee etc. received by the Petitioner are per se not commercial in nature. The State has a duty to provide education to the people of India. This duty is being discharged through the University. 58. .... Learned Senior Advocate for the Petitioner University is justified in contending that where the main activity is not a business then any incidental or ancillary transaction held, would normally amount to business only if an independent intention to carry on business in the incidental or ancillary transaction is established. The burden to prove such intention rests on the Department. Hence, where the main and dominant activity of the University is education, it cannot be termed as business activity to demand tax. We draw support from the decision of the Supreme Court in Commissioner of Sales Tax v. Sai Publication Fund, (2002) 4 SCC57 for the view that we take. 61. For the reasons aforementioned we are of the opinion that the activities of the petitioner University not being....
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....nature of activities which are contemplated therein. 28. That thus leaves us to consider whether the power to regulate, as exercised, could be said to be an activity akin to trade, commerce, manufacture, profession, vocation, adventure, voyager and which are activities enumerated in Section 2 (17) (a). We find ourselves unable to fathom how a power of regulation which stands statutorily vested in a Commission could be countenanced to fall within the ambit of any of those activities. It becomes pertinent to note that while Section 2 (17) (i) also encompasses activities or transactions undertaken by the Central or State Governments or a local authority, the said clause too would have no application since a Commission which comes to be constituted under the Electricity Act cannot be equated with the Central or State Governments. The expression "local authority" is defined by Section 2 (69) to include local bodies such as Panchayats, Municipalities, Municipal Committees, Cantonment Boards or Regional Councils and other authorities which may come to be constituted in terms of Articles 371, 371A, 371J or the Sixth Schedule to the Constitution. A Commission which is constituted u....
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....) does not arise in the first place. In other words, if the activity of the University does not fall within clause (a), the question of taxing ancillary, etc., activities under clause (b) would never arise. 13.1 Additionally, I find that this question was answered in the following manner by the Bombay High Court in Goa University's case supra,: " 57. The GST has been demanded based on the income recorded in the financial statements, however the activity has to qualify supply to be made liable to GST. The amounts that are chargeable to tax arise on account of supply of goods or services or both and in the absence of this, the show cause notice would be bad on jurisdictional facts. We rely on the decision of the Supreme Court in Girdhari Lal Nannelal Vs Commissioner of Sales Tax (1976) 3 SCC 701 (Para 7), Haleema Zubair Vs State of Kerala 2009 (13) STR 113 (SC) (Para 22) and P.C. Ittymathew & Sons Vs Deputy Commissioner of Sales Tax (2000) 9 SCC 318 in support of our observations. 58. The petitioner University has reported income in the income and expenditure account and its schedules and sub-schedules have been listed and the GST is demanded on th....
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.... (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; (b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government. Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply. 14.1 The Bombay High Court in the case of Goa University's case supra, observed that the fee collected by the University cannot be termed as 'consideration' as contemplated under Section 7 of the CGST Act, 2017. The Court held as under: 36. We have already noticed the requirements of Section 7 of the CGST Act. Section 2(31) of the CGST Act defines the phrase ....
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....ion is to provide an essential service, in larger public interest, such as water cess or sewage cess or fee, such consideration, received by a statutory body, would not be considered "trade, commerce or business" or service in relation to those. Non statutory bodies, on the other hand, which may mimic regulatory or development bodies such as those which promote trade, for a section of business or industry, or are aimed at providing facilities or amenities to improve efficiencies, or platforms to a segment of business, for fee, whether charged by subscription, or specific fee, etc. may not be charitable; when they claim exemption, their case would require further scrutiny. 37. The concept of consideration involves an element of contractual relationship wherein the person undertaking the activity of supply does so at the desire of another in exchange of consideration. Essentially there shall involve a quid pro quo. In our opinion, the fee collected for affiliation will not qualify as consideration since neither quid pro quo is involved nor it is a contractual obligation. In Principal Addl. Directorate General DGGSTI v. Rajiv Gandhi University of Health Sciences (supra), the ....
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....they perform public functions and are entrusted with a statutory duty in public interest, the aforesaid decision of the Bombay High Court and our own Hon'ble Division Bench decision in RGUHS's case supra would be applicable and it cannot be said that the activities fall within the contractual realm. Therefore, it cannot be said that the statutory functions carried out for a fee would constitute "consideration" under the GST legislations. Issue No.(iii) is accordingly answered in favour of the petitioners-Universities. Re: Issue No. (iv) - Whether the activities undertaken by the Universities are statutory and regulatory in nature ? 15. The Bombay High Court in the case of Goa University's case supra, observed that the activities of the University are statutory/regulatory in nature. The Court held as under: 40. The petitioner is actively involved in imparting education to students, and it acts as a regulator of education. It is in view of the affiliation from the petitioner University to constituent colleges that the colleges conduct programmes of study. The activities undertaken by the Petitioner University are statutory and regulatory in nature.....
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....reading of the relevant statutory provisions and judicial precedents, the fees collected by the Petitioner University are in terms of the statutory mandate to undertake the activities as set out in the Goa University Act towards regulating the activity of colleges affiliated to the University cannot be brought under the GST net. 15.1 In the present case in W.P.No.26067/2023, M/s Visvesvaraya Technological University is established under the Visvesvaraya Technological University Act, 1994 (VTU Act) and notified under Government Order No. Law/63/LGN/94 dated 03.04.1995. 15.2 On perusal of the statutory provisions of VTU Act, it is clear that the objective of the Act is to establish and to incorporate a University for the purpose of ensuring proper and systematic instruction, teaching, training and research in development of engineering, technology and allied science in the State of Karnataka. The statutory provisions also provide for powers to develop, promote and organize continuing education system in co-ordination and with co-operation of the constituent units. To grant affiliation to constituent colleges [See Sections: 2(2), 2(10), 2(13), 2(14), 4, 5, 7, 8, 40 o....
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....he statutory provisions also provide for affiliation of colleges to the privilege of University [See sections: 2(2), 2(13), 3, 4, 59 of KSU (Amended) Act, 2015]. 15.7 Therefore, the activities carried out by the Universities are under the respective statutory provisions, which are in the nature of statutory/regulatory functions and the same cannot be termed as commercial in nature. In terms of the above, the activities not being commercial or business in nature and the fee so charged not qualifying as consideration, I am of the view that the charging provisions under Section 9 r/w Section 7 of CGST/ KGST Act, 2017 would not get attracted to the activities of the University. Issue No. (iv) is accordingly answered in favour of the petitioners-Universities. Re: Issue No. (v) - Whether the services provided by the Universities are exempt from GST in terms of Entry No. 66 of Notification No. 12/2017-CT (R) dated 28.06.2017 ? 16. It is contended by the learned Senior counsel that the services, if any, provided by the Universities are covered under exemption i.e., Entry No. 66 of Notification No. 12/2017-CT (R) dated 28.06.2017. Entry No. 66 of the Noti....
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.... the Hon'ble Division Bench of this Court in the case of Principal Additional Director General, DGGSTI vs Rajiv Gandhi University of Health Sciences - (2024) 22 Centax 526 (Kar.), observed that University would also qualify as an educational institution for the purpose of exemption. The Court held as under: 46. We are in respectful agreement with the view of the High Court of Karnataka in Rajiv Gandhi University of Health Sciences (supra) where it is held that University which grants affiliation is also an educational institution. The Madras High Court in Madurai Kamaraj University vs Jt. Commr. of GST & C.Ex., Madurai [2021 (54) GSTL 385 (Mad.)], held that the word "educational institution", cannot denote only the college affiliation to the University, but it includes the University. We therefore find merit in the submissions of the learned Senior Advocate that even assuming that the affiliation fees collected by the University, is to be regarded as a service, the said services provided by Goa University are covered under the 1st limb of the exemption entry as ultimately the student of an affiliation college has to be regarded as a student of the University which grants h....
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....: 54. .................... The Circular dated 11.10.2024 in its application to the Goa University where it is clarified that the affiliation services by universities to colleges are not by way of services related to the admission of students to such colleges or the conduct of examinations by such colleges, is erroneous. 16.5 Respondents placed reliance on the judgment of the Telangana High Court in the case of Care College of Nursing's case supra to contend that affiliation fees charged by the University from colleges for granting affiliations to colleges is not exempted under Sl.No.66 of Notification No.12 of 2017, dated 28.06.2017. In my view, with due respect, the High Court of Telangana in the case of Care College of Nursing's case supra has not addressed the issue as to whether Universities undertake a supply in the course or furtherance of business for a consideration and consequently, GST could be levied on a University. Further, the Telangana High Court failed to notice that the definition of 'educational institution' is contained in the Notification itself and does not restrict the same to colleges but is wide enough to cover a University and this aspect ....
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....e GST Legislations in as much as the said Circular assumes that the said activity of affiliation service provided by the University to their constituent colleges would qualify as supply. 51. The Supreme Court in CCE Vs. Ratan Melting and Wire Industries, 2008 (231) E.L.T. 22 (S.C) held that the clarifications which are contrary to the statutory provisions have no existence in law to attract levy of GST in terms of section 9, it has to be first established that the activity undertaken by the petitioner University would qualify to be 'supply' in terms of Section 7 of the CGST Act. Imposing levy by way of clarifications in our view is impermissible. Moreover, by the impugned Circular, additional restrictions for availing exemption duty under Entry 66 of the Notification dated 28.06.2017 is enforced and therefore also the clarification which is not in consonance with the statutory provisions and the exemption Notification dated 28.06.2017 cannot be acted upon. 52. Thus, the said clarifications restrict the scope of exemption notification and makes the fee collected by the board from the educational institution for the purpose of accreditation to such board, liable for....
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..... To support this view, we rely on Sandur Micro Circuits Ltd. Vs. CCE, Belgaum, 2008 (229) ELT 641 (SC). Reliance is also placed by learned Senior Advocate on Union Of India V/s. Inter Continental (India) 2008 (226) ELT 16 (SC). Their Lordships while examining the issue as to whether CBЕС by way of circular could introduce additional condition for claiming exemption for imported crude palm oil, held that that by issuing a circular subsequent to a notification, the department could not add new conditions to the notification, thereby restricting the scope of exemption notification or whittling it down. 17.1 Therefore, I am of the opinion that the impugned Circulars are contrary to the legal provisions and the express wordings of the exemption notification. Issue No.(vi) is accordingly answered in favour of the petitioners-Universities. Re:Issue No. (vii) : Whether the affiliation fees, PG registration fees, admissions fees, convocation fees, and other sums collected by the petitioners-Universities from the College/students would be exigible to payment of GST ? and Issue No. (viii): Whether the impugned Show Cause Notices and Or....