The Bombay High Court (Goa Bench) in Goa University Versus Joint Commissioner of Central Tax examined whether various statutory fees collected by a university—such as affiliation, examination, convocation, prospectus, and migration certificate fees—constitute a “supply” under Section 7 of the GST law. The GST Department had demanded tax on these collections, treating them as taxable services. The Court held that these fees arise from statutory educational functions and are not commercial activities carried out in the course of business. Since the university is a statutory body established to impart education, its activities cannot be equated with business transactions. The Court further observed that such fees are regulatory or statutory in nature and do not qualify as “consideration” because they lack contractual obligations or quid pro quo. Relying on judicial precedents and GST exemption provisions for educational institutions, the Court concluded that these charges are not liable to GST. The ruling draws a clear distinction between sovereign or statutory functions and taxable commercial supplies under GST.
The Issue :
The GST Department demanded tax on various fees collected by the university, including:
- Affiliation fees
- Convocation fees
- Examination fees
- Prospectus fees
- Migration certificate fees
The key question before the Court was:
Do such statutory fees constitute “supply” under Section 7 of the GST law?
Ruling :
A. In terms of Section 7, in order to qualify as supply, an activity shall be in the course or furtherance of business.
The Court observed that fees such as affiliation, prospectus and migration certificate, sports etc. are received by the University and are per se not commercial in nature but are towards educational activities. Consequently, the activity does not qualify as supply.
The Appellant being a creature of statute to impart education cannot be said to be undertaking business.
B. In terms of Section 7 of the GST provisions, an activity would constitute as supply when the same is undertaken for a consideration.
The Court, placing reliance on the decision of the Hon’ble Supreme Court in the case of Ahmedabad Urban Development Authority, observed that the fees such as affiliation, PG registration, prospectus etc. do not qualify as ‘consideration’ as the same are in the nature of statutory fee or regulatory fee in terms of the statutory provisions and not contractual in nature.
Consequently, it was held that fees so collected do not qualify to be consideration which is amenable to GST.
C. Placing reliance on the decision of the High Court of Karnataka in the case of Principal Addl. Directorate General DGGSTI v. Rajiv Gandhi University of Health Sciences, the Court held that the above contested fees will not qualify as consideration since neither quid pro quo is involved nor it is a contractual obligation.
D. Referring to Entry 66 of Notification No. 12/2017, the High Court observed that the University would also qualify as an educational institution and hence services provided by the university (if qualifying as supply) would also qualify for exemption under clauses (a) and (b) of the said entry.
E. The Court further observed that clarifications issued vide Circular dated 17.06.2021 and Circular dated 11.10.2024, so far as Universities are concerned, are contrary to the statutory provisions of Sections 7 and 9 of the GST legislations, as there is a presumption of supply by University to constituent colleges.
The Larger Question :
If every statutory fee collected by a public authority is treated as consideration,
would regulatory functions of the State also become taxable services?
This judgment appears to draw an important boundary between public law functions and commercial supply under GST.
Author Bio
