Maharashtra Universities face GST Scrutiny over Affiliation Fees, Anticipates Resolution

Universities under GST Scrutiny over Affiliation Fees demand swift resolution of the issue
GST - GST Scrutiny - Maharashtra Universities - Anticipates Resolution - TAXSCAN

For months, the Maharashtra Public Universities have been under scrutiny by the Goods and Services Tax ( GST ) authorities for not paying taxes on affiliation fees charged to colleges. They fear this burden will ultimately fall on students through increased costs.

The universities appealed to the state governor, who is their chancellor, during a recent meeting of the Joint Board of Vice-Chancellors. Both the governor’s office and the state government have agreed to represent them before the GST council.

While educational services for students ( like entrance exams ) are GST-exempt, the GST council ruled in 2021 to apply 18% GST to other board services, similar to accreditation fees. However, universities argue affiliation fees are purely for educational services (setting curriculum, conducting exams, awarding degrees) and not accreditation.

The GST authorities requested detailed information on affiliation fees from July 2017 to March 2023, causing anxiety among universities.  They argue this tax would be a departure from the norm and raise student costs.

A university finance officer clarifies that affiliation fees cover essential services provided by universities. A government official counters that the GST council’s 2021 circular might encompass these fees.

The crux of the issue lies in the distinction between affiliation and accreditation fees. Tax experts believe they are different, and court rulings support the GST exemption for educational services. However, there are conflicting interpretations.

The education sector and tax professionals hope the GST council will provide a clear resolution soon.

Unfortunately, With the impending election season, the schedule for the next GST Council meeting remains uncertain, giving rise to apprehensions about the timely resolution of critical tax-related issues. Reportedly, no Goods and Services Tax Council meeting will be held until the new government forms.

Read More: GST Council Meeting Unlikely till Formation of Newly Elected Govt

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