TaxTMI 
TaxTMI 
2026 (9) TMI 273
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.... by M/s Council for the Indian School Certificate Examinations (hereinafter referred to as 'the appellant'), having its registered office at Pragati House, Nehru Place, New Delhi, under Section 112 of the Central Goods and Services Tax Act, 2017 (hereinafter called the 'Act 2017'). 2. The factual matrix giving rise to the present proceedings indicates that the appellant is engaged in the field of education and undertakes activities such as granting affiliation to schools up to the senior secondary level, conducting public examinations (ICSE and ISC), registering students, and organizing academic programs and projects, classified under Services Accounting Code 9992. It is registered under Section 12A of the income tax Act, 1961 as a charitable organization and is recognized under the Delhi Education Act, 1973. The appellant claims to operate without government funding and exists solely for educational purposes. The appellant had registered with GST Department on 12/09/2018. 3. The anti-evasion branch of CGST Delhi East Commissionerate office got the specific intelligence input that the appellant had not discharged Goods and Services Tax on various fees collected from affiliate....
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....The investigating authority alleged suppression of facts and intent to evade tax; demand was proposed under Section 74(1) of the Act, 2017 for the period July 2017 to August 2018, as tabulated below: Table B: GST Liability Under Section 74 of the Act, 2017 (July 2017 - August 2018) S.No. Head Taxable Value (Rs.) GST @18% (Rs.) 1. Processing Charges 14,20,000 2,55,600 2. Affiliation Fee 3,55,50,000 63,99,000 3. Annual Registration Charges 7,09,90,000 1,27,78,200 4. Late Charges 10,14,000 1,82,520 5. Licence Fee (Syllabus/Q.Papers) 99,61,000 17,92,980 6. Documentation Charges 6,32,19,500 1,13,79,510 7. Late Entry Fee 44,76,950 8,05,851 TOTAL 18,65,31,450 3,35,93,661 8. For the subsequent period September 2018 to November 2023, demand was proposed under Section 73(1) of the Act, 2017 as tabulated below: Table C: GST Liability Under Section 73 of the Act, 2017 (September 2018 - November 2023) S.No. Head Taxable Value (Rs.) GST @18% (Rs.) 1. Processing Charges 59,40,000 10,69,200 2. Affiliation Fee 21,30,25,000 3,83,44,500 3. ....
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....n or conduct of examination by an educational institution or school. The adjudicating authority further held that The affiliation extends the capacity to the school to function and impart education to the students in terms of relevant statutes/s ; the exemption entry claimed to be applicable by the Noticee in the instant case is restricted to services provided in relation to "admission" and "conduct of examination" and does not extend to all services pertaining to imparting education by such educational institution ; the scope and ambit of service rendered by CISCE is different from the ambit of services which the exemption entry purports and intends to exempt (Entry no. 66(b)(iv) of the Exemption Notification 12/2017-CT(R) dated 28th June 2017 refers). 12. The adjudicating authority inferred that the "Affiliation Fee" levied by appellant on affiliated schools does not constitute a service of education nor is it directly provided by an educational institution to its students, faculty, or staff. Rather, this service is extended to schools to ensure adherence to established standards in terms of course offerings and facilities, thus maintaining a certain level of quality.' 13. ....
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....ore, it can be inferred that the "Affiliation Fee" levied by CISCE on affiliated schools does not constitute a service of education nor is it directly provided by an educational institution to its students, faculty, or staff ; Rather, this service is extended to schools to ensure adherence to established standards in terms of course offerings and facilities, thus maintaining a certain level of quality. 17. In para 5.3.3 of the order passed by appellate authority, it is mentioned that; Vide Circular No. 151/07/2021-GST dated 17th June 2021 it has been clarified that (i) GST is exempt on services provided by Central or State Boards (including the boards such as NBE) by way of conduct of examination for the students, including conduct of entrance examination for admission to educational institution [under S. No. 66 (aa) of notification No. 12/2017-CT(R)]. Therefore, GST shall not apply to any fee or amount charged by such Boards for conduct of such examinations including entrance examinations. (ii) GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notificatio....
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....ollected nor paid GST thereon. Based on Circular No. 234/28/2024 dated 11.10.2024, the first appellate authority set aside the demand of GST on affiliation fee and affiliation form processing charges on an 'as is where is' basis for the period 01.07.2017 to 17.06.2021, and set aside the corresponding demand of Rs.2,59,38,900/-. However, this relief was confined strictly to the said period, and the taxability of affiliation fee and affiliation form processing charges for the subsequent period from 18.06.2021 to November 2023 was confirmed by the first appellate authority. 21. On the aspect of annual registration charges and late charges associated with such registration, the first appellate authority chose to adopt stricter interpretation. Relying upon circular no 151/07/2021dated 17th June 2021, the first appellate authority concluded that such services do not qualify as being directly related to the conduct of examinations. Accordingly, GST demand on annual registration charges and late registration fees was upheld by the first appellate authority for the entire period July 2017 to November 2023. 22. A different view altogether was taken with respect to documentation charges....
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....ms of Section 59 of the Act 2017,moreover they did not disclose their outward supply / tax payment etc. in any of their due GST returns ; It was only after initiation of investigation, the fact of non-payment of GST on taxable supply of affiliation and other related activities of the tax-payer came in the knowledge of department ;this act of omission and commission on the part of appellant falls under the ambit of willful suppression of material information from the knowledge of department to evade the payment of GST. 27. Hence, first appellate authority held that the demand of GST by invoking extended period of limitation as provided under Section 74(1) of CGST Act 2017 by the Adjudicating Authority is just and fair and that the imposition of penalty under section 73(1) and 74(1) of the CGST Act, 2017 is also appropriate. In the result, the first appellate authority partly allowed the appeal filed by the appellant against the OIO dated 30.04.2024. Substantial relief was granted in respect of documentation charges, licence fees, late entry fees, migration charges and affiliation-related charges for the period July 2017 to June 2021, while the demand in respect of annual registra....
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....ll be the relevant financial year; that different tax periods cannot be covered in a single show cause notice. (b) In the absence of any trade or commerce, the levy of GST on affiliation, registration and other educationally linked receipts is arbitrary and bad in law. Educational activities of the appellant cannot be treated as 'business' under Section 2(17) of the Act 2017 or 'supply' under Section 7 of the Act 2017 thereof. (c) Affiliation is not an independent commercial activity but an intrinsic and indispensable part of the examination system. Schools without CISCE affiliation cannot present students for ICSE/ISC examinations. Affiliation constitutes the first and foundational stage of the examination process and is covered under 'services relating to admission to or conduct of examination' under Entry 66(b)(iv) of notification dated 28.06.2017. (d) Annual registration charges and late registration charges are in the nature of continuation of affiliation. Non-payment results in de-affiliation. Such charges are directly connected with the examination framework and ought to have been granted exemption under Entry 66 of notification dated 28.06.2017. ....
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....sts in the present case. (h) Where the foundation for Section 74 of the Act 2017 fails, penalties under Section 122(2)(b) of the Act 2017and interest under Section 50 of the Act 2017 for that period cannot survive. The dispute being interpretational in nature, imposition of penalties is unwarranted in any event. 30. The respondent filed a para-wise reply/comments to the appeal filed by the appellant. The submissions of the respondent Department, being germane to the issues arising for consideration, are mentioned below. a) that the contention of the taxpayer is not acceptable. The Show Cause Notice dated 19.01.2024 has been issued in accordance with the provisions of the CGST Act, 2017. The fact that the notice covers multiple tax periods does not, by itself, render the proceedings without jurisdiction or invalid. The notice clearly identifies the period-wise tax liability and separately invokes the applicable provisions of Section 74 for the period involving alleged suppression/fraud and Section 73 for the remaining period, in accordance with the statutory provisions. b) that the CGST Act, 2017 does not contain any express prohibition against issuance....
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....stitute a self-contained code, and taxability is in accordance with the definitions and charging provisions contained therein. CBIC Circular No. 151/07/2021-GST dated 17.06.2021 merely clarifies the scope of exemption available to educational institutions and educational boards. It does not provide a blanket exemption from GST on all receipts collected by such institutions. The taxability of each activity is determined with reference to the relevant exemption notification and the nature of the supply. Accordingly, the respondent agitated in the reply that the affiliation fees, annual registration fees, late fees and other charges collected by the appellant constitute consideration for taxable supplies under the CGST Act, unless specifically covered by any exemption notification and that the appellant has not established that the impugned receipts are wholly exempt from GST. Hence, the demand confirmed by the Adjudicating Authority has been rightly sustained and the grounds raised by the appellant deserve to be rejected. f) that the contention of the appellant that the affiliation fee is exempt under Entry 66 of Notification No. 12/2017-CT (Rate) dated 28.....
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....id circular was issued by the CBIC in exercise of the powers conferred under Section 168 of the CGST Act, 2017 to ensure uniformity in the implementation of the Act. Such circulars are binding on the departmental officers so long as they remain in force. j) that the appellant's contention that the Circular has been quashed by the Hon'ble Karnataka High Court and the Hon'ble Bombay High Court does not render it inapplicable in the present case. The judgments relied upon by the appellant operate within their respective territorial jurisdictions and do not constitute binding precedents upon authorities functioning outside those jurisdictions. Further, there is no authoritative pronouncement of the Hon'ble Supreme Court declaring the circular to be invalid or laying down the law on the issue. Therefore, the Commissioner (Appeals) was justified in following the clarification issued by the Board. k) that Circular No. 234/28/2024-GST does not create a new levy, nor does it amend the provisions of the CGST Act or Notification No. 12/2017-CT (Rate). It merely clarifies the Department's understanding regarding the scope of affiliation services vis-à-vis the exemption....
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....7 is a specific exemption applicable only to the services expressly covered therein. Annual registration charges and late payment charges do not fall within the ambit of "services relating to admission to, or conduct of examination by, an educational institution." Therefore, the appellant is not entitled to claim exemption merely on the ground that such charges are connected with the continuation of affiliation. p) that the appellant's argument that annual registration charges are identical to affiliation fees is misconceived. Even assuming that such charges are incidental to affiliation, the taxability of affiliation-related services has already been examined separately, and the Commissioner (Appeals) has rightly upheld the levy of GST for the period from 18.06.2021 onwards in accordance with the applicable statutory provisions and the clarification issued by the CBIC. Consequently, annual registration charges and late registration charges, being ancillary to the affiliation process, are equally liable to GST for the said period. q) that late registration charges are recovered on account of delayed compliance with the prescribed timelines and constitute additiona....
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....the statutory GST returns. The non-payment of tax continued over a prolonged period despite the appellant being a registered person under the CGST Act and being under a statutory obligation to correctly determine and discharge its tax liability under the self-assessment mechanism prescribed under Section 59 of the Act. u) that the taxable nature of the services came to the notice of the Department only upon investigation/inspection conducted by the departmental officers. Had the investigation not been initiated, the non-payment of GST would have remained undetected. Thus, the material facts necessary for assessment were not voluntarily disclosed by the appellant, justifying invocation of the provisions of Section 74 of the CGST Act. v) that the plea of bona fide belief is not substantiated by any contemporaneous evidence. Mere reliance on legal opinions or subsequent judicial pronouncements cannot automatically establish bona fide belief so as to exclude the applicability of Section 74. Throughout the relevant period, the appellant neither sought any advance ruling nor approached the Department for clarification regarding the taxability of the impugned receipts. I....
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....sed on the due date of filing of the return; whether different tax periods can be covered in a single show cause notice? Issue no II: Whether the activities of the appellant constitute 'supply' under Section 7 read with Section 9 of the Act 2017? Issue no III: Whether affiliation (including affiliation processing/form charges) is an independent taxable supply or forms an integral part of 'services relating to admission to, or conduct of examination' under the Exemption Notification dated 28.06.2017, and is thereby exempt? Issue no IV: Whether annual registration charges and late registration charges are independent taxable supplies or are intrinsically connected with affiliation/examination functions and are eligible for exemption under the said Notification? Issue no V: Whether Circular No. 234/28/2024 dated 11.10.2024 is a valid and binding instrument regard being had to the appellant's contentions that the said Circular has been quashed by certain Hon'ble High Courts or that Section 168 of the Act, 2017 does not confer upon the CBIC the power to interpret statutory provisions, and the Circular is to that extent ultra vires or that the Circular erroneously equates aff....
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....ure, wager or any similar activity, whether or not for pecuniary benefit but it in no way extend to the statutory/regulatory functions of a University. (c) It was argued that all activities of the Appellant are performed for education, and not business, purposes, and are therefore outside the scope of Section 7 of the Act, 2017. Quoting T.M.A. Pai Foundation v. State of Karnataka, (2002) 8 SCC 481, it was urged that activities carried out by educational institutions cannot be termed commercial in nature and do not fall within the definition of "business," and that incidental or ancillary activities to education would equally not fall within the ambit of "business." It was argued, the activities of a University granting affiliation do not qualify as "supply" within the ambit of Section 7 of the Act, 2017. (d) Ld. Counsel further argued that education is a mission and not a trade or business, and that the Appellant carries out its affiliation-related activities without any profit motive. Reliance was placed on the judgment of the Hon'ble Apex Court on the question whether education is to be regarded as a business, as well as on Commissioner of Sales Tax v. Sai Publi....
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....arch, its regulatory and statutory functions do not fall within the scope of "supply" amenable to GST. (g) Without prejudice to the above, and even assuming that Universities are providing services, it was highlighted by Ld. Counsel that such services are exempt under Entry No. 66 of Notification No. 12/2017-CT(R) dated 28.06.2017. This entry exempts (a) services provided by an educational institution to its students, faculty and staff, and (b) services provided to an educational institution relating to admission to, or conduct of examination by, such institution [clause (b)(iv)]. Reliance was placed on Karnataka High Court decision in Principal Addl. DGGSTI v. Rajiv Gandhi University of Health Sciences, since confirmed by the Hon'ble Supreme Court and on the Madras High Court decision in Madurai Kamaraj University v. Jt. Comr. of GST & C.Ex., Madurai, 2021 (54) GSTL 385 (Mad.), it was canvassed that a university granting affiliation is itself an "educational institution" within the meaning of the exemption entry, and that the expression "educational institution" is not confined to the affiliated college alone but includes the University. It was ....
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.... No. 234/28/2024-GST dated 11.10.2024 (issued pursuant to the recommendations of the 54th GST Council meeting), which purport to clarify that affiliation services provided by Universities to their constituent colleges are not covered within the ambit of the exemption available to educational institutions, and that only services relating to conduct of entrance examinations, or input services relating to admission/examination, are exempt, while other services such as "accreditation" are taxable at 18%. These Circulars, it was argued, are contrary to the statutory provisions of Sections 7 and 9 of the Act, 2017, inasmuch as they proceed on the assumption that the affiliation service provided by a University to its constituent colleges would qualify as "supply," without first establishing the jurisdictional fact that the activity satisfies the statutory ingredients of Section 7 of the Act, 2017. Reliance was placed on the decision of the Hon'ble Supreme Court in CCE v. Ratan Melting and Wire Industries, 2008 (231) ELT 22 (SC), for the proposition that clarifications/circulars which are contrary to statutory provisions have no existence in law. Circulars or executive clarifications, it ....
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....ving suppression/fraud, whereas Section 73 of the Act, 2017 has been invoked for the remaining period; and that the validity of the notice has to be examined with reference to compliance with limitation for each tax period individually, and not merely on the ground that several years have been clubbed together in a single notice. Neither the Show Cause Notice nor the Adjudication Order, it was maintained, becomes invalid merely because multiple financial years are covered therein. Reliance was placed on the judgment dated 26.08.2025 of the Hon'ble High Court of Delhi in M/s Mathur Polymers v. Union of India (upheld by the Hon'ble Supreme Court vide Order dated 07.11.2025); the judgment dated 29.07.2025 of the Hon'ble High Court of Delhi in M/s Ambika Traders v. Additional Commissioner, Adjudication, DGGI, Delhi (upheld by the Hon'ble Supreme Court vide Order dated 01.09.2025); the judgment dated 16.03.2026 of the Hon'ble High Court of Delhi in M/s Technosys Integrated Solutions Pvt. Ltd. v. Union of India; and the Order dated 06.01.2025 of the Hon'ble High Court at Bombay in M/s Riocare India Pvt. Ltd. v. Assistant Commissioner, CGST & C.Ex. (b) On the question whether the....
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.....6), the Order-in-Appeal dated 13.01.2025 (Paras 5.3.1 to 5.3.5), and the judgment dated 30.07.2018 of the Hon'ble Supreme Court in Commissioner of Customs (Import), Mumbai v. Dilip Kumar & Company (Paras 41, 43 and 52(3)). (d) On the applicability of Circular No. 234/28/2024-GST, it was urged that the Circular, issued under Section 168 of the CGST Act for ensuring uniform implementation, continues to bind departmental officers, and that judgments of the Hon'ble High Courts of Karnataka and Bombay do not automatically bind authorities functioning outside their respective territorial jurisdictions. The Circular, it was explained, merely clarifies the Department's understanding of Entry 66 of Notification No. 12/2017 and does not create any new levy, and the substance of affiliation and accreditation is similar, inasmuch as both involve scrutiny of standards prior to grant of recognition; hence, reliance placed on the said Circular by the Adjudicating/Appellate Authority is legally justified. Reliance was placed on the judgment dated 10.02.2026 of the Division Bench of the Hon'ble High Court of Madras (Madurai Bench) (Paras 8.10 and 9). (e) On annual registration ch....
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....tax, interest and penalty, were accordingly defended as legally sustainable. Reliance was placed on the Order-in-Original dated 30.04.2024 and the Order-in-Appeal. 34. Having bestowed anxious consideration to the rival submissions, and upon careful perusal of the record including the SCN dated 18.01.2024, the OIO dated 30.04.2024, the impugned order dated 09.01.2025, the memorandum of appeal, the counter of the respondent, and the judicial decisions cited at the Bar, we have heard the Ld. Counsels for parties as well as we have perused the record. The arguments were advanced by Sh. M.P. Rastogi, Ld. Counsel on behalf of appellant and by Sh. Davashya Jyoti Jyotirmoy, Ld. Joint Commissioner (Authorized Representative) on behalf of the respondent. 35. OUR FINDINGS ON EACH ISSUE ARE DELINEATED BELOW: Issue no I: Whether the issuance of SCN for a consolidated period of July 2017 to November 2023, covering various limitations and the order passed in furtherance thereto for a consolidated period is in accordance with the law or not; whether assessment involves a definite tax period based on the due date of filing of the return; whether different tax periods can be covered i....
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....ion between the two provisions pertains to the nature of the allegation, the applicable period of limitation, and penal consequences; it does not create a statutory embargo against consolidation in a single adjudicatory instrument. This position is reinforced by the statutory language of Sections 73(3), 73(4), 74(3) and 74(4) of the Act 2017, which employs the expressions "for any period" and "for such periods", in contradistinction to the expression "financial year" used in Sections 73(10) and 74(10) of the Act 2017, thereby expressly contemplating a notice covering a period spanning more than one financial year. 39. The appellant has relied upon decision of Hon'ble High Court of Mumbai in M/s Milroc good earth developers, Mariposa Beachgrove Vs Union Of India 2025(10) TMI 867 and other Hon'ble High Courts to substantiate the claim that consolidating various financial years/tax periods in a single show cause notice is impermissible. We would, however, prefer to follow the view taken by the jurisdictional Hon'ble High Court of Delhi on an identical issue in W.P.(C) 4853/2025 M/S Ambika traders Vs Additional Commissioner, the relevant part of which is reproduced as under: ....
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....reinabove, this Court is not delving in the present proceedings to determine whether fraud is, in fact, made out and therefore will not undertake the adjudication on that point. However, insofar as the submission seeks to confine Ambika Traders only to cases involving allegations of fraudulent availment or utilisation of ITC across financial years, this Court is unable to agree. In this context, we deem it important to reproduce the relevant para of the said judgment: '43. Insofar as the issue of consolidated notice for various financial years is concerned, a perusal of section 74 of the CGST Act would itself show that at least insofar as fraudulently availed or utilised ITC is concerned, the language used in section 74(3) of the CGST Act and section 74(4) of the CGST Act is "for any period" and "for such periods" respectively. This contemplates that a notice can be issued for a period which could be more than one financial year. Similar is the language even in section 73 of the CGST Act.' 43. The extract from Ambika Traders (supra) leaves no manner of doubt that Hon'ble High Court, in the said judgment, contemplated and accepted consolidation of SCNs covering multiple ....
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....tion by a person in the course or furtherance of business; (aa) the activities or transactions, by a person, other than an individual, to its members or constituents or vice-versa, for cash, deferred payment or other valuable consideration. Explanation. -For the purposes of this clause, it is hereby clarified that, notwithstanding anything contained in any other law for the time being in force or any judgment, decree or order of any Court, tribunal or authority, the person and its members or constituents shall be deemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;] (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.] . . .....
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....ely in the context of statutory universities constituted under specific Parliamentary or State legislative enactments, exercising statutory powers mandated by law. The appellant/CISCE, on the other hand, is a society registered under the Societies Registration Act, 1860. It is not constituted by any Parliamentary or State enactment, nor does it discharge any function made obligatory by a statute. Its fee-rates are fixed internally by its own financial committee. This distinction is material. The ratio of decisions involving statutory universities discharging compulsory statutory functions cannot be extended mechanically to a registered society whose governance, finances, and fee-structure are self-determined. 53. Further, the Ahmedabad Urban Development Authority judgment relied upon by the appellant pertains to a statutory body discharging compulsory regulatory functions under a legislative mandate; that decision does not govern a society that voluntarily determines its fees and services. 54. Now coming to the other issue, the relevant extract of Exemption Entry No. 66 of the Exemption Notification dated 28.06.2017, issued under Section 11(1) of the Act, 2017, reads as under....
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....ion bench Hon'ble supreme court reaffirmed the dictum of Hansraj Gordhandas v. H.H. Dave (AIR 1970 SC 755) that exemption from taxation is determined wholly by the language of the notification, without recourse to equitable or purposive considerations. It referred with approval to Lord Halsbury in Commissioner of Inland Revenue v. James Forrest [(1890) 15 AC 334], to Partington v. Attorney General [(1869) LR 4 HL 100], and to the celebrated dictum of Rowlatt J. in Cape Brandy Syndicate v. Inland Revenue Commissioners [(1921) 1 KB 64]: "In a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about tax. Nothing is to be read in; nothing is to be implied." The Hon'ble Constitution Bench also reaffirmed, with approval, the celebrated rule stated by Rowlatt J. in Cape Brandy Syndicate case (Supra). This is a Constitution Bench pronouncement that is absolutely binding upon every court, tribunal, and authority in India, including this Tribunal, by virtue of Article 141 of the Constitution of India. 57. Now turning to the Hon'ble High Court decisions, i.e., Principal Addl. DG DGGSTI v. Rajiv Gandhi University of Health Scie....
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....niversity v. Jt. Comm. of GST & C.Ex., Madurai [(2021) 94 GSTR 192 (Mad.)] it was held that the term 'educational institution' in Entry 66 includes the university/board itself and that affiliation fees fall within the exemption. Manonmaniam Sundaranar University v. Joint Director (GST Intelligence) [2021-TIOL-888-HC-MAD-ST] held that affiliation fees are statutory levies not amenable to GST. 62. These are Hon'ble High Court decisions of persuasive value. However, the question of how far "services relating to admission to or conduct of examination" in Entry 66(b)(iv) of Notification dated 28.06.2017 can be extended to cover affiliation must be answered primarily by reference to the plain language of the entry, strictly construed as mandated by the constitution bench of Hon'ble Supreme Court in Dilip Kumar case (supra). The broad purposive readings adopted in several of these Hon'ble High Court decisions, while well-intentioned, must be measured against the strict interpretive standard authoritatively prescribed. 63. Under the law of precedents, these decisions, while learned and deserving of respect are decisions of a Hon'ble High Court and cannot be treated as overriding the ....
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....d examination is too remote and too mediated by independent intervening events; the school's own educational processes the student's own academic performance, and the annual registration cycle to constitute the direct nexus that "relating to" requires when read strictly. 68. The appointment and salary of teachers also "relates to" examination, because without teaching there can be no student ready to sit for one. That the entire edifice of education is, in this extended sense, "in relation to" examination, cannot, when the statutory scheme is examined holistically, be what the legislature intended by the phrase "services relating to admission to, or conduct of examination" in Entry 66(b)(iv) of the Exemption Notification dated 28.06.2017. The exemption is targeted, specific, and confined to activities that are constitutive of the examination process itself, not to every activity in the chain of causation that ultimately leads to an examination being held. Applying the Doypack case (supra) reasoning to this entry would obliterate any distinction between taxable and exempt services and would render the entry boundless and otiose, an outcome plainly contrary to the principle of str....
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....cture, financial capacity, and adherence to prescribed norms, and culminates in the grant or refusal of formal recognition to the school under the CISCE framework. This service is rendered to the school as an entity; it is not a service rendered to any student, nor is it a service directly relating to the conduct of any examination. The affiliation process occurs much before any examination and is a threshold eligibility determination for the school. The nexus between affiliation and the conduct of examination is, at best, indirect and remote; schools must first affiliate, and only thereafter can their students appear. Affiliation cannot be brought within "services relating to admission to, or conduct of examination" without supplying, by implication and inference, what the notification does not say. The first appellate authority correctly held affiliation to be an independent taxable supply. 72. It may be noted that the issue of taxability of GST on affiliation fees charged by educational/regulatory boards has recently engaged the attention of the Hon'ble Supreme Court. In Bharathidasan University v. State of Tamil Nadu, arising from GST show cause notices issued under Section ....
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....v) to entry No.66 to Notification No. 12/2017-CT (Rate), dated February 28, 2017 vide Notification No. 2/2018-CT (Rate), dated January 25, 2018. 77. There is no ambiguity in the language in entry (b)(iv) to entry 66 to Notification No. 12/2017-CT (Rate), dated June 28, 2017 as amended by Notification No. 2/2018-CT dated January 25, 2018. Entry (b)(iv) to entry 66 to Notification No. 12/2017-CT (Rate) dated June 28, 2017 as amended by Notification No. 2/2018-CT, dated January 25, 2018 is applicable only for services relating to examination or conduct of examination by the petitioner colleges in W.P. No. 11038 of 2022 and W.P. No. 5967 of 2023 and not to work relating to affiliation." 66. The Hon'ble Division bench of Madras High Court also referred to a judgement of Hon'ble High Court of Telangana also observed that; "7. The High Court of Telungana, when called upon to decide the issue of levying service tax affiliation fee collected by the University in Care College of Nursing and others Vs. Kaloji Narayana Rao University and others reported in 2024 (121) GSTR 106, held as below: "34. Relying upon the constitutional decision of the Hon'ble Apex C....
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....re Educational Institutes, which are standalone Universities, which admit students directly, conduct examination and confer degree, but they are not permitted to grant affiliations to college. They are deemed to be Universities. No doubt Universities fall within the definition of Educational Institutions. However, the service of granting affiliation is not part of admission of students or conduct of examination for them." 74. The Hon'ble Division Bench Of Madras High Court after referring to the definition of 'service' under Section 2(102) of the Act, the Exemption notification No. 12/2017and Circular No. 234/28/2024 GST-dated 11.10.2024 issued by CBIC, which clarifies the applicability of GST on the service of affiliation provided by universities to colleges laid down that the view expressed in the subsequent judgment namely, Pondichery University's case (Supra) declares the correct legal position, since the affiliation fee collected by the Universities does not fall within exemption. Accordingly, the fee collected by the University from the Colleges as affiliation fees was held to be amenable for levy of GST. 75. The Hon'ble Supreme Court in Bharathidasan Universit....
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.... the first appellate authority. In support of this conclusion, reliance is placed upon Circular No. 234/28/2024 dated 11.10.2024, F. No. CBIC-190354/149/2024-TO(TRU-II)-CBEC, issued by the Government of India, Ministry of Finance, Department of Revenue (Tax Research Unit), North Block, New Delhi, wherein it has been clarified as under: "Therefore, as recommended by the GST Council, it is clarified that services of affiliation, provided to schools by Central or State educational boards or councils, or other similar bodies, by whatever name called, are taxable. Further, as recommended by the Council, the payment of GST on the services of affiliation provided by Central and State educational boards or Councils, or other similar bodies, to all schools is regularised on 'as is where is' basis for the period from 01.07.2017 to 17.06.2021." 78. In view of the foregoing discussion, and in view of a meaningful interpretation of the statutory framework, we are of the considered opinion that the appellant/CISCE's activities constitute 'supply' within the meaning of Section 7(1)(a) read with Section 2(17) of the Act 2017, and that affiliation is an independent taxable supply fallin....
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....tion of schools, being charged annually for continuance of affiliation, in default whereof the school would stand de-affiliated. On this basis it is contended that the Appellate authority ought to have exempted the whole of the annual registration charges and late charges, not only for the period July 2017 to 17th June 2021 (as already exempted by the appellate authority in relation to affiliation charges), but also for the subsequent period 18th June 2021 to November 2023, under the said Exemption Notification, as claimed by the appellant. 81. The respondent simultaneously controverted the above ground on the following counts: (i) The annual registration charges and late charges for annual registration are an independent consideration received for continuation of affiliation and maintenance of the affiliation status of schools, collected towards continued monitoring, regulatory oversight, administrative processing and renewal of affiliation, and are distinct from services relating to admission of students or conduct of examinations. (ii) The exemption under Entry 66 of Notification No. 12/2017-CT (Rate) dated 28.06.2017 is a specific exemption applicable only ....
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....ate authority for affiliation charges) but also for the remaining period, having regard to the nature of the receipts. 84. Before delving in detail into this matrix, it would be apposite to have a glance at the findings of Appellate authority. 85. The appellate authority, at para 5.4 of the impugned Order-in-Appeal (Page 27 of 31), has recorded the following finding on this issue: "5.4 As regards Annual Registration Charges, Late Charges for Annual Registration charges, these services are not directly related to conduct of examination. As submitted by the appellant Annual Registration of schools is essential to collect details of the number of students, subjects they will take in the examinations, schools available as exam centres, geographic dispersal of students etc. and properly plan for holding the examinations across multiple centres with minimum dislocation to students, preparation and distribution of question papers with utmost secrecy and deployment of examination invigilators. I find that in terms of Circular no. 151/07/2021-GST dated 17th June 2021, GST is exempt on input services relating to admission to, or conduct of examination, such as online testing s....
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....ion entry No. 66(b)(iv) of the Exemption Notification dated 28.06.2017 is confined to services "relating to admission to or conduct of examination." Applying the strict construction rule mandated by the Constitution Bench of the Hon'ble Apex Court in Commissioner of Customs (Import) v. Dilip Kumar & Co. (Supra), the exemption cannot be extended to administrative or preparatory charges. 92. The appellate authority after due deliberations on the nature of these charges correctly found that annual registration charges and late registration charges are preparatory and administrative in character and do not fall within the exemption entry. The fact that non-payment may lead to de-affiliation is a commercial consequence of a contractual obligation to the appellant/CISCE; it does not transform an administrative charge into an examination-related service. 93. Accordingly, on this facet of the issue, we conclude that the appellate authority had rightly held that annual registration charges and late registration charges do not qualify for exemption under Entry 66(b)(iv) of the Exemption Notification dated 28.06.2017. The strict construction mandate in Dilip Kumar (supra) forecloses any....
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....ly a species of affiliation charges and must consequently travel with them for every purpose, including the benefit of the "as is where is" regularization. While it may be true, for the purpose of determining taxability itself, that registration and affiliation charges share a common character as consideration for the Board's continuing regulatory and administrative functions vis-à-vis its affiliated schools, that similarity of character cannot be pressed into service to import into the Circular a fiscal concession which the GST Council chose not to extend to it. The regularization under paragraph 3.4 of the Circular is a deliberate and specific relaxation, granted qua affiliation services alone, for a defined period; it is not a general amnesty for all receipts of a cognate nature. 98. As regards the reliance placed on Rajiv Gandhi University (supra), its precedential value has already been considered by the Hon'ble Supreme Court in Bharathi Dasan (supra) on 16.07.2026 which has already been discussed in issue no II and III above. 99. We accordingly hold that Circular No. 234/28/2024-GST is confined in its operation to affiliation services and does not extend to, or c....
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....submitted that the Circular, issued under Section 168 of the Act 2017 for ensuring uniform implementation, continues to bind departmental officers, and that with due respect to the judgments of the Hon'ble High Courts of Karnataka and Bombay do not automatically bind authorities functioning outside their respective territorial jurisdictions. The Circular, it was submitted by the Ld. Authorized representative for the respondent merely clarifies the Department's understanding of Entry 66 Exemption Notification dated 28.06.2017 and does not create any new levy, reliance being placed on the Madurai Bench decision of the Hon'ble Madras High Court dated 10.02.2026. 103. We have examined the rival contentions of the parties The findings on this issue are as follows. 104. The CBIC Circular No. 151/07/2021-GST was issued pursuant to deliberations of the GST Council and in exercise of powers under Section 168 of the Act 2017. It specifically identifies "providing accreditation to an institution or to a professional so as to authorize them to provide their respective services" as a taxable supply. Circular No. 234/28/2024-GST dated 11.10.2024, issued following the express recommendation....
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....ices of educational boards by name, on the independent basis of the 54th GST Council's recommendation, without requiring any equation between affiliation and accreditation. This contention cannot, therefore, affect the validity or applicability of Circular No. 234/28/2024 dated 11.10.2024. 108. As regards the submission of the Ld. Counsel for the appellant that Section 168 of the Act 2017 does not confer interpretive power on the CBIC, drawing on Keshavji Ravji & Co. (supra). It is noted that Circular No. 234/28/2024 dated 11.10.2024 was not issued in exercise of any claimed power of statutory interpretation. It was issued to operationalize a specific recommendation of the 54th Meeting of the GST Council. The GST Council is a constitutional body created under Article 279A of the Constitution of India, comprising representatives of the Union and the States, and its recommendations carry a distinct constitutional character and a persuasive weight considerably greater than that of a circular issued by a subordinate authority purely in exercise of statutory power under Section 168 of the Act 2017. The objection that Section 168 of the Act 2017 does not empower the CBIC to interpret ....
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....CM APPL. No. 59655/2025 before the Hon'ble High Court of Delhi assailing the vires of Circular No. 151/07/2021-GST dated 17.06.2021 and Circular No. 234/28/2024-GST dated 11.10.2024, Ld. Counsel for the appellant submitted that Vide order dated 06.10.2025, the Hon'ble High Court observed, prima facie, that the said Circulars cannot be used against the Petitioner, for raising any demands. 111. The Hon'ble High Court, however, directed learned Counsel for the Respondent to seek instructions in the matter, issued notice and listed the matter for further hearing. The matter is presently stated to be pending, with the next date of hearing being 16.11.2026. 112. The aforesaid order of the Hon'ble High Court of Delhi has received our due and respectful consideration. The mere pendency of the aforesaid writ petition, and the prima facie view expressed therein, however for the following reasons cannot be regarded as conclusively determining the issues arising for consideration in the present appeal. 113. First, the observation made by the Hon'ble High Court is expressly qualified as being "prima facie" and was rendered at an interlocutory stage of the proceedings. The writ petition....
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....nsultant 2008 (3) TMI 59 CESTAT Kolkata. Ld. Counsel further submitted that civil appeal against this judgement of CESTAT has been dismissed by Hon'ble Apex court. 118. As against this argument, the Ld. Authorized representative for the respondent submitted that the said rule applies only where it is established that the price charged was inclusive of GST, and that the burden of proof lies upon the supplier claiming such benefit. It was pointed out that the appellant has not produced invoices, agreements, fee notifications, accounting records, or correspondence to demonstrate that the fees collected were GST-inclusive, and that the mere absence of a separate GST column in the fee structure cannot give rise to a presumption that the consideration included GST. Submission considered. Our findings are as below. 119. We deem it appropriate to mention Rule 35 of the Rules 2017, which is reproduced below; Rule 35. Value of supply inclusive of integrated tax, central tax, State tax, Union territory tax. - Where the value of supply is inclusive of integrated tax or, as the case may be, central tax, State tax, Union territory tax, the tax amount shall be determine....
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....ler, namely, the respondent. In such a transaction, it is the seller who takes on the obligation of paying all taxes on the goods sold and in such a case the said taxes on the goods sold are to be deducted under Section 4(4)(d)(ii) and this is precisely what has been directed by the Tribunal. There is also nothing to show that the sale price was not cum-duty." 123. Further The Hon'ble Apex court in appeal Civil Appeal no 4055 of 2002 in Commissioner of Central Excise, Jaipur Vs Dugar Tetenal India Limited, Date of judgement: 07/03/2008 had reiterated its earlier dictum in Maruti Udyog (supra) and held as under; "13. The assessee in addition to the submission that the extended period of limitation could not be invoked had contended that the selling price of the goods was the cum-duty price and they were entitled to deduct the duty element from the sale price for the purpose of determination of assessable value of the goods in terms of Section 4(4)(d)(ii) of the Act. The Tribunal accepted this plea of the assessee relying upon the decision of the Tribunal in the case of Shri Chakra Tyres Ltd (supra). The view taken in Shri Chakra Tyres Ltd (supra) was affirmed by this Cou....
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.... 67 read with the erstwhile Service Tax (Determination of Value) Rules, 2006, which mandated that where the gross amount charged is inclusive of service tax, the value of taxable service shall be computed by treating the gross amount as cum-tax value. Under the GST regime, the corresponding statutory mechanism is found in Section 15 CGST Act 2017 r/w Rule 35 of the CGST Rules, 2017. 126. While independently considering the issue, we also take judicial notice of the reasoning adopted by the CESTAT, Kolkata in Commissioner of Central Excise, Patna v. Advantage Media Consultant, reported at 2008 (10) S.T.R. 449 (Tri. -Kol.), to be of considerable persuasive value. In the said decision, while examining the question of valuation, it was held that where the amount realized from the recipient does not separately indicate or include the tax component, the gross amount so received is liable to be treated as the cum-tax value, and the tax liability is accordingly required to be re-quantified by treating such gross amount as inclusive of the tax payable thereon. 127. The said decision was carried out in appeal by the Revenue before the Hon'ble Supreme Court. The Hon'ble Apex Court was p....
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.... was separately collected from the recipients. It is thus evident from the aforesaid discussion and the guidance rendered by the Hon'ble Constitutional Courts that where tax has not been collected separately, the gross amount received must be treated as the value of taxable service inclusive of tax, for the purpose of quantifying the tax liability. 131. In view of the dictum of the Hon'ble Apex Court, read with Rule 35 of the Rules, 2017, the Appellant is entitled to the benefit of cum-tax valuation. The amounts collected by the Appellant are accordingly held to be inclusive of GST. In view of the foregoing discussion, this issue is decided in favour of the appellant. 132. Issue No. VI is thus decided in favour of the appellant. Issue no VII: Whether the conditions precedent for invoking Section 74 of the Act 2017 namely fraud, willful misstatement, or suppression of facts with intent to evade tax are satisfied in the present case; and whether CBIC Instruction No. 5/2023-GST dated 13.12.2023, which stipulates that Section 74(1) cannot be invoked merely on non-payment without positive material evidence of fraud or wilful misstatement or suppression of facts to evade tax,....
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....d the rival submissions advanced by the Ld. Counsel for the Appellant and the Ld. Authorized Representative for the Respondent. For the reasons recorded hereinbelow, we find that the conditions precedent for invocation of Section 74(1) of the Act 2017 are not satisfied, and this issue is answered in favour of the Appellant. 136. Section 74(1) of the Act 2017 reads as below: "Section 74. Determination of tax [, pertaining to the period up to Financial Year 2023-24,] not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful-misstatement or suppression of facts. - Where it appears to the proper officer that any tax has not been paid or short paid or erroneously refunded or where input tax credit has been wrongly availed or utilised by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall serve notice on the person chargeable with tax which has not been so paid or which has been so short paid or to whom the refund has erroneously been made, or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why he should not pay the amount specif....
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....information was not disclosed deliberately to escape from payment of duty. Where facts are known to both the parties the omission by one to do what he might have done and not that he must have done, does not render it suppression." 140. In Continental Foundation Joint Venture Holding, Nathpa v. Commissioner of Central Excise, Chandigarh-I, 2007 (8) TMI 11 (SC), it was held that; "9. We are not really concerned with the other issues as, according to us, on the challenge to the extended period of limitation ground alone the appellants are bound to succeed. Section 11A of the Act postulates suppression and, therefore, involves in essence mens rea. 10. The expression 'suppression' has been used in the proviso to Section 11A of the Act accompanied by very strong words as 'fraud' or 'collusion' and, therefore, has to be construed strictly. Mere omission to give correct information is not suppression of facts unless it was deliberate to stop the payment of duty. Suppression means failure to disclose full information with the intent to evade payment of duty. When the facts are known to both the parties, omission by one party to do what he might have done would not rend....
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....te evasion; and second, that the liability came to light only through investigation under Section 67 of the Act 2017. Each of these grounds is examined separately. 143. As regards the first ground, we find that the Service Tax regime which preceded the GST regime contained, for all material purposes, an identical exemption entry for educational services under the Negative List in Section 66D of the Finance Act, 1994, corresponding to Entry 66(b)(iv) of the Exemption Notification dated 28.06.2017 under the Act 2017. The service tax authorities also issued notices and raised demands against the appellant for the period 2012 to 2017 also on the same lines. The appellant was contesting, and not conceding, its liability in that litigation. The mere pendency of a genuinely contested legal question on an identical statutory scheme does not, ipso facto permit an inference that the appellant made a calculated decision to evade tax under the successor enactment; it is equally, and more naturally, consistent with a genuinely and honestly held, if ultimately mistaken, belief that the exemption continued to apply. 144. This view is fortified by the fact that the GST Council, at its 54th M....
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....the second ground, the appellant has contended tat the record shows that the respondent's own letter dated 01.03.2023 called for details of the charges collected by the appellant; that the appellant furnished item-wise particulars vide its letters dated 15.03.2023 and 27.03.2023; and that the respondent thereafter raised a demand letter dated 08.05.2023 on the strength of that information all several months prior to the inspection conducted on 05.12.2023. This establishes that the respondent was in possession of specific, affirmative knowledge of the nature, quantum, and character of the appellant's receipts well before the formal investigation commenced. This is squarely covered by the dictum in Pushpam Pharmaceuticals and Continental Foundation Joint Venture Holding (Supra) where facts are known to the Department, mere omission or failure to self-assess does not amount to suppression. 147. The relevant CBIC Instruction No. 5/2023-GST dated 13.12.2023, reads as below; "3.3 From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis-statement or suppression of facts to evade....
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....t in M/S Safecon life science Private Limited v. Additional Commissioner Grade 2 and Another, Writ Tax No. 389 of 2023, decided on 09.09.2025 (Neutral Citation No. 2025: AHC:158800) had held that proceedings under Section 74 cannot be sustained in the absence of a finding of fraud, wilful misstatement, or suppression of fact. The Hon'ble High Court observed as under: "GST regime has been brought by the Central Government for ease of business in the country, but the revenue officers are bend upon to act against the very theme/ intend of it. When it was noticed by the Government that under the garb of Section 74 of the Act various dealers are being harassed, issued a circular dated 13.12.2023 where it has specifically been stated that proceedings under section 74 of the Act can be initiated if there is a fraud or willful misstatement or suppression of fact to evade payment of tax and not otherwise." 151. The Hon'ble High Court in M/s Safecon Lifescience (Supra) further invoked the analogous provision under Section 11-A of the Central Excise Act, 1944, and the Apex Court's exposition in Continental Foundation Joint Venture Holding, Nathpa, H.P. v. Commissioner of Central E....
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.... known to the Department. Hence, if 10% was not added when computing the duty at the time of clearance by the job worker, the department ought to have taken immediate action under sub-section (1). The proviso cannot be invoked to extend the period of limitation." The ratio of the above dictum applies to the present case under consideration before this Tribunal. 155. Cumulatively, therefore, the ingredients of fraud, wilful misstatement, or suppression of facts with intent to evade tax, required for invocation of Section 74(1) of the Act 2017, stand unestablished for the period July 2017 to August 2018. The extended period of five years under Section 74(1) is accordingly not available to the respondent for that period. The demand pertaining to the period July 2017 to August 2018, comprising annual registration charges and late registration charges aggregating Rs.1,29,60,720/- (Rupees One Crore Twenty-Nine Lakh Sixty Thousand Seven Hundred and Twenty only), is accordingly set aside in its entirety, both for want of valid invocation of Section 74(1) of the Act 2017 and as being barred by limitation. 156. Accordingly, Issue VII is answered in favour of the Appellant. The invoc....