In a significant development, the Delhi High Court has directed the National Board of Examinations ( NBE ) to refund the Goods and Services Tax ( GST ) collected from candidates, citing the erroneous imposition of GST on course fees.
The legal dispute arose from notifications issued by the NBE on January 15, 2021, February 15, 2021, and August 19, 2021, mandating the collection of GST at the rate of 18% from Diplomate of National Board ( DNB ) candidates along with their course fees.
NBE stated that, “NBE is in receipt of several queries regarding submissions of annual course fee. It is hereby clarified that the following annual course fee shall be applicable for all ongoing Broad Speciality ( DNB ), Super Speciality ( DrNB ) and Fellowship ( FNB ) trainees irrespective of the year of their joining”, thereby releasing the notice with 18% GST mandate for all ongoing Broad Speciality ( DNB ), Super Speciality ( DrNB ) and Fellowship ( FNB ) trainees.
The Petitioners, Association of Diplomate of National Board Doctors & another contested the applicability of GST to course fees before the Delhi High Court.
The court held that the notifications directing the collection of GST on course fees were erroneous and ordered their withdrawal. Acknowledging the mistake, the NBE was directed to issue instructions for the prompt refund of GST collected from the candidates.
In compliance with the court’s order, the NBE filed an affidavit on October 25, 2023, disclosing the number of candidates affected and the transactions involved. The court noted that a portion of the collected GST remained with the NBE, while the majority had been remitted to hospitals along with the course fees.
Kirtiman Singh, counsel appearing for the NBE, on instructions, states that the impugned notifications to the extent that they seek to collect GST on course fee, shall be withdrawn by issuance of a public notice.
The counsel for the parties have also suggested further directions to be issued by this Court, which commends to us. The petitioners seek that the directions be implemented within the strict timelines. However, the respondents have some reservations in that regard.
Considering the suggestion made by the counsel, it was further directed as under:
i. In cases where the GST amount is available with the NBE, the NBE shall take steps to refund the same to the candidates from whom the said GST was collected, as expeditiously as possible.
ii. In cases where the GST amount has been transferred to the hospitals and same has not been deposited with the GST authorities, the concerned hospitals shall refrain from doing so and take steps to immediately refund the amount to the candidates from whom the GST was collected.
iii. In cases where the GST has been deposited with the concerned GST authorities, the concerned hospitals shall take steps to apply for the refund of the said GST.
The bench also observed that, the affidavit filed by NBE indicates that there are two three transactions which have not been traced to the candidates. The NBE shall make all efforts to trace the said transactions to the concerned candidates and upon identifying the candidates, take steps to ensure that the GST collected is refunded to them. In the event, the GST is available with the NBE, it will be refunded to them immediately.
It was added that, in cases where the GST has been transferred to hospitals, the same would abide by the directions as issued above.
In addition, the High court also urged the concerned GST authorities to process such applications as expeditiously as possible. The concerned hospitals, on receipt of the fund from the GST authorities, shall take immediate steps to refund the same to the candidates from whom the GST was collected.
In view of the above, the Delhi High Court Division Bench of Justices Vibhu Bakhru and Amit Mahajan observed that no further orders are required to be passed in this regard except to restrain NBE from collecting any further GST pursuant to the said notification.
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