Bengaluru North University Vs Joint Commissioner of Central Tax (Karnataka High Court)
The Hon’ble Karnataka High Court in Bengaluru North University & others v. Joint Commissioner of Commercial Taxes & others [WP No. 4254/2024 & others, order dated April 22, 2025] held that fee collections by universities like affiliation fees, registration fees, and convocation fees do not amount to a “supply” or “business” under GST law, thus are not taxable. The Court quashed show cause notices and orders imposing GST on such fees, holding that universities perform statutory, non-commercial functions and that the impugned CBIC circulars and GST demands violated the extant legal and constitutional framework.
Facts:
The Bengaluru North University, Rajiv Gandhi University of Health Sciences, and Visvesvaraya Technological University (“the Petitioners”) are statutory universities established under respective State Acts to oversee education, including affiliating colleges and conducting examinations.
The Joint Commissioner, Central and State GST authorities (“the Respondents”) issued various show cause notices and demand orders alleging GST liability on affiliation fees, registration fees, convocation fees, and related charges collected from students and affiliated colleges over multiple financial years.
The Petitioners contended that their core activities pertain to education and regulatory roles, which are constitutional obligations and not commercial ventures. Therefore, such fees are not “consideration” for a taxable supply and fall outside GST’s ambit. They challenged the legal validity of circulars interpreting such fees as taxable, asserting those circulars exceed authority, and the demands violated fundamental legal principles.
