Activities or Services Provided by Universities to Its Affiliated Colleges and Students Exempted from GST: AAR [Read Order]

The Kerala Authority for Advance Rulings (AAR), Thiruvananthapuram has held that the activities or services provided by universities to their affiliated colleges and students are exempted from Goods and Services Tax (GST).

The ruling came in response to the advance ruling sought by the University of Calicut, Kerala.

The University of Calicut, established under the Calicut University Act, 1975, is a statutory university with jurisdiction over several districts in Kerala.

The applicant, represented by Shri V V Ashokan submitted that as per Section 56 of the Calicut University Act, it has the power to grant affiliation to the colleges and can collect application fee from the colleges seeking affiliation along with incidental fees.

The applicant provides various functions and services to its affiliated colleges including conducting inspections, entrance examinations, admission processes, conducting examinations, issuing marks lists, etc.

The AAR ruled that the services provided by the university to its affiliated colleges fall under the definition and scope of “supply” as per Section 7 of the Central Goods and Services Tax (CGST) Act, 2017. This means that these services could be subject to GST.

However, the AAR further clarified that the services provided by the university are exempted from GST under entries 4 and 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Entry 4 exempts services provided by a governmental authority in relation to any function entrusted to a municipality under Article 243W of the Constitution of India and Entry 5 exempts services provided by a governmental authority in relation to any function entrusted to a Panchayat under Article 243G of the Constitution.

The Authority consisting of Dr. S.L. Sreeparvathy, IRS, Additional Commissioner of Central Tax and Abdul Latheef K, Joint Commissioner of State Tax clarified that the University of Calicut, being a government authority established under an Act of the State Legislature, with more than 90% control in carrying out functions entrusted to a Panchayat or Municipality, falls within the definition of “Governmental Authority.”

The AAR further added that since education is a function entrusted to both Panchayats and Municipalities under the Constitution, the services provided by the university to its affiliated colleges are exempted from GST under entries 4 and 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

To Read the full text of the Order CLICK HERE

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