Services of University of Kota to its constituent Colleges is ‘Supply of Service’ liable to GST: AAR [Read Order]

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The Rajasthan Advance Authority Ruling (AAR), presided over by members Umesh Kumar Garg and M.S.Kavia ruled that the affiliation provided by the Kota University to its constituent colleges for imparting education is a supply and taxable under GST.

The applicant is a university founded in accordance with the 2003 University of Kota Act. The applicant engages in college affiliation-related activities as an associated party in order to approve schools offering programmes of study for admission to the University’s examinations for titles and diplomas under the established circumstances and to revoke such approval.

Furthermore, to designate any college as an autonomous college with the government’s approval in the manner and under the conditions specified, to revoke such designation, and to charge the institutions certain fees in this respect.

As determined by the Affiliation Fee Committee, which varies from course to course for which affiliation is provided and notified by the university with copies to the education department, etc., the applicant also collects affiliation fees from various self-financing/non-government colleges/government colleges.

It was stated by the applicant that in the Pre-GST regime, affiliation fee was an exempt taxable service.

The contention of the applicant that “affiliation” is the exempted supply with purpose to the colleges for admission of students and/ or conduct of examinations for the purpose of getting a degree.

The authority observed that the whole claim is based on entry at SI.No.66 of Notification No.12/2017- C.T.(Rate) dated 28.06.2017 which exemption is claimed and will take it up for analysis.

The entry number 66 asserts that the services rendered by an educational institution to its students, faculty, and staff, including transportation services, catering, including any government-sponsored midday meal programme, security services, cleaning, and housekeeping performed in such an educational institution, and services related to admission to or the administration of examinations by such institutions, are exempt from the tax.

The members noted that the entry at 66(b)(iv) only seeks to exempt those services that are provided to such institutions in relation to the admission of students or the administration of examinations for such admission to all educational institutions, including the higher educational institutions, which were not exempted prior to this amendment.

The bench recognised that the affiliation fees under the general functions of the University to colleges regarding approval for a college, approval for a course, start-up approval, permanent affiliation, continuation of affiliation for each course, permission for increase in intake for each course, and penal fee for late Application appeared to be completely unconnected to admission to or the conduct of examination by such institution.

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