GST Chargeable on Application Fee for Conducting Kerala Dewasom Recruitment Board Examinations: AAR [Read Order]

The Kerala Authority for Advance Ruling (KAAR) has ruled that Goods and Services Tax (GST) has to be levied on the application fee collected from the candidates for conducting examinations that recruit candidates to various posts in Dewasom boards across the state.

The applicant here is the Kerala Dewasom Recruitment Board that was constituted by the government of Kerala for the selection of suitable candidates for various permanent posts in dewasom bears such as clerk, cashier, confidential assistant, etc. The main activity of the applicant is conducting examinations in relation to the process.

The State government grants aid to the applicant. The applicant submitted that the recruitment process spans various activities, commencing from publication of notifications to the final selection of the candidates. The application fee collected from the candidates constitutes applicants' own fund, and it is used to meet various expenses.

The application was forwarded to the jurisdictional officer as per the provisions of Section 98(1) of the CGST Act.

It was also observed that the application fee was in direct correlation to the service provided by the applicant. It was observed that it is not a statutory levy but a consideration charged in exchange for permitting the candidate to participate in the selection process. It was observed that the relationship between payment and the service rendered is a reciprocal obligation

Here, the board conducts the examination, arranges evaluation, declares the result and provides a list of eligible candidates, and in return, the candidates pay the prescribed fee. So such a reciprocal relationship is included within the supply of service for consideration as in sections 7(1)(a), 2(17) and 2(31) of the act.

It was also observed that the activities of the board fall within the ambit of business under section 2(17) of the act. Thus, the fee can be taxable under section 15 of the act.

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