HC Dismisses Petitions Against GST Collection by KNRUHS
Legal Affairs L. Ravichander 24 February 2024 11:50 PM (Update:24 February 2024 11:50 PM)
Telangana High Court. (DC) Hyderabad: A two-judge bench of the Telangana High Court dismissed a batch of writ petitions assailing the demand of GST by Kaloji Narayana Rao University of Health Sciences (KNRUHS) on affiliation fees and inspection fees together with arrears from July 2017. The bench, comprising Justice P. Sam Koshy and Justice A. Laxminarayana Alishetty, examined the demand at the instance of Care College of Nursing and other nursing colleges.
The university, referring to the communications from the authorities, stated that it has been directed by GST authorities to collect and deposit the GST dues from July 2017 onwards on affiliation and inspection fees paid by private institutions. It is called upon the colleges to submit 9% SGST and 9% CGST (a total of 18% as GST) on the affiliation and inspection fee paid to the University from July, 2017 onwards by way of a demand draft. All the petitioners are nursing colleges affiliated to the university, which charges inspection and affiliation fees from the respective colleges. All the colleges in this batch of writ petitions have paid inspection fees and also affiliation fees after being granted affiliation. The Central Board of Indirect Taxes (CBIT) made a demand for payment of GST. At the time when the GST was enacted, “educated services” was one of the taxable subjects. However some services enjoyed statutory exemption. It was also made clear that conducting entrance examination and collection of entrance fees also had been brought within the exempted category and, thus, it would include affiliation and inspection fees, the petitioner contended.
It was unsuccessfully canvassed by the petitioner that affiliation is intrinsically connected with the educational institutions having affiliation from a particular university. That since the object of the varsity is to also ensure a uniform curriculum and standards among the different affiliated colleges imparting education on the same course. In the instant case, it is the nursing course, which is being imparted by the petitioners herein, therefore, the first respondent, the university would also fall within the purview of ‘educational institution’ and as such the petitioners would also be exempted from the levy of GST on inspection and affiliation fees. Dominic Fernandez, appearing for the CBITC, pointed out that the notifications issued in 2018 showed that collection of affiliation and inspection fee does not stand exempted. He relied upon the decision of the department, which pointed at exempted services, including collection of application fees for entrance examination and also collection of fees for issuance of eligibility certificates and admission fees. They also decided that as per the circular G.S.T. @ 18% applies to such services provided by the board or university so far as accreditation to education institutions was concerned. The bench on a scrutiny of the various notifications and the law specially said that inspection and affiliation fees, however, is not part of the said notification granting exemption and added that surprisingly, in the instant case, as of now, the first respondent does not seem to be aggrieved of the demand raised by the respondent-department so far as payment of GST on inspection and affiliation fees was concerned.
It is at the inception stage of the educational institutions that the inspection is conducted and the affiliation is granted thereafter. The admission and the services rendered by the educational institutions to the students, the faculty and the staff are all services rendered subsequent to the affiliation. Therefore, the contention that the petitioners have canvassed was hard to accept, the bench reasoned.
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