Case Law Details
Biyani Shikshan Samiti Vs Union of India (Rajasthan High Court)
The Rajasthan High Court disposed of the present batch of writ petitions after recording the consensus of all counsel that the issue stood concluded by its earlier judgment in D.B. Civil Writ Petition No. 9556/2024, Rajasthan Technical University, Kota vs. Union of India & Ors., decided on 23.02.2026. Applying that decision mutatis mutandis, the Court allowed the present petitions.
The earlier decision had framed and answered four principal issues. On the first issue, namely whether grant of affiliation constitutes a supply of service under Section 7 of the Central Goods and Services Tax Act, the Court held that supply arises only when an activity is carried out in the course or furtherance of business. It found that grant of affiliation is a statutory function enabling a university to discharge its core educational mandate through affiliated colleges. Applying the doctrine of ejusdem generis to Section 2(17), the Court held that affiliation cannot be equated with trade, commerce or any activity of a commercial character and, therefore, does not constitute a supply of service.
On the second issue concerning whether affiliation fees amount to consideration, the Court held that affiliation is compulsory for colleges and does not involve choice, bargaining or reciprocity. It found that the fee is a statutory levy rather than payment for a negotiated service and concluded that the essential element of consideration was absent.
On the third issue regarding the applicability of the exemption under Entry 66 of Notification No. 12/2017-CT (Rate), the Court held that, even assuming affiliation constituted a service, it is inseparably connected with curriculum approval, admission of students, conduct of examinations and conferment of degrees. Observing that students admitted through affiliated colleges are, in law, students of the university, the Court held that Entry 66 should be interpreted purposively to include services forming the backbone of educational delivery, including affiliation.
On the fourth issue relating to the GST levy, the Court held that circulars or executive clarifications cannot override statutory provisions or exemption notifications. It concluded that levy of GST on affiliation fees resulted in indirect taxation of education and held that the impugned levy was without authority of law.
Summarising its conclusions, the Court held that grant of affiliation by a university is a statutory and regulatory function and does not constitute a supply of service under the CGST Act. It further held that affiliation fees are not consideration for any taxable activity and that, in any event, affiliation services are exempt under Entry 66 of Notification No. 12/2017-CT (Rate). Accordingly, the levy and collection of GST on affiliation fees were held to be illegal and unsustainable.
The Court also referred to the Affiliation Bye-laws of the Central Board of Secondary Education, observing that affiliation enables schools to prepare students for Board examinations and that the conditions governing school affiliation are pari materia with those applicable to affiliation of colleges with universities, including curriculum, academic standards, infrastructure and presentation of students for examinations. It further noted that Revenue Notification No. 14/2018 dated 26.07.2018 introduced a clarification in Notification No. 12/2017 recognising Central and State Educational Boards as educational institutions for the limited purpose of providing services by way of conducting examinations. The Court held that denying universities similar treatment, when they also conduct examinations for students of affiliated colleges leading to conferment of degrees, would be manifestly arbitrary and discriminatory. It further held that affiliation services rendered by universities fall within Entry 66(a) as well as Entry 66(b)(iv) of the exemption notification.
In the relief granted in the lead case, the Court allowed the writ petitions, held the proposed levy and demand of GST on affiliation fees unsustainable, quashed the show cause notice dated 26.12.2023 issued by the Office of the Commissioner, Central Excise & CGST Commissionerate, and directed that, subject to verification that the GST burden had not been passed on to students through tuition fees, any GST already paid on affiliation fees be refunded within four months, failing which interest at 7% per annum would be payable from the date of payment until refund.
Following the above judgment, the Court allowed the present petitions on the same terms, directed that a copy of the order be placed in all connected matters, and disposed of all pending applications.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
All the learned counsels are ad idem that the issue raised in these petitions stands finally adjudicated by this Court in a bunch of cases, with the lead case being D.B. Civil Writ Petition No.9556/2024, titled as Rajasthan Technical University, Kota vs. Union of India & Ors. decided on 23.02.2026, wherein this Court gave certain findings and conclusion. The same has been reproduced hereinunder:-
FINDINGS
42. Issue (i): Whether Grant of Affiliation is a Supply of Service-
Section 7 of the CGST Act contemplates supply only when an activity is carried out in the course or furtherance of business. Grant of affiliation is a statutory function enabling the University to discharge its core mandate of imparting education through affiliated colleges. Applying the doctrine of ejusdem generis to Section 2(17), affiliation cannot be equated with trade, commerce, or any activity of commercial character. Accordingly, we hold that grant of affiliation does not constitute a “supply of service”. 42.1. Issue (ii): Whether Affiliation Fees Constitute Consideration-
Affiliation is compulsory for colleges; there is no element of choice, bargaining, or reciprocity. The fee is a statutory levy, not a payment for a negotiated service. We thus hold that in absence of quid pro quo, the essential element of “consideration” is missing. 42.2. Issue (iii): Applicability of Exemption under Entry 66.
Even assuming affiliation to be a service, it is inseparably connected with: curriculum approval, admission of students, conduct of examinations, and conferment of degrees. Students admitted through affiliated colleges are, in law, students of the University. We hold that entry 66 must be interpreted purposively to cover services forming the backbone of educational delivery, including affiliation. 42.3. Issue (iv): Validity of GST Levy:-
Circulars or executive clarifications cannot override statutory provisions or exemption notifications. Levy of GST on affiliation fees results in indirect taxation of education, which is impermissible. We hold that the impugned levy is therefore without authority of law.
CONCLUSION
43. As an upshot of the what is reasoned and discussed in the preceding part, it is held that grant of affiliation by a University is a statutory and regulatory function and does not constitute a supply of service under the CGST Act. Affiliation fees are not consideration for any taxable activity. Even otherwise, affiliation services are exempt under Entry 66 of Notification No. 12/2017- CT (Rate). Levy and collection of GST on affiliation fees is illegal and unsustainable.
44. Before we part, though we have already opined as above, but it bears reiteration, notwithstanding the views already recorded, that under the Affiliation Bye-laws of the Central Board of Secondary Education, “affiliation” is expressly understood as an institutional arrangement enabling a school to prepare its students for admission to the Board examinations. A careful reading of the Bye-laws makes it abundantly clear that the conditions governing affiliation of schools with the Board are, in substance and effect, pari materia with those governing affiliation of colleges with a university. These conditions include adherence to the prescribed curriculum, maintenance of academic and infrastructural standards, and presentation of students for evaluation by the examining body
44.1. Pertinently, by Revenue Notification No. 14/2018 dated 26.07.2018, a clarification was introduced in the parent Notification No. 12/2017 whereby Central and State Educational Boards were deemed to be “educational institutions” for the limited purpose of providing services by way of conduct of examinations to students.
45. Thus, in this backdrop, any attempt to deny universities similar treatment at par with Central and State Educational Boards is manifestly arbitrary and ex facie discriminatory, particularly when universities equally discharge the function of conducting examinations for students of affiliated colleges as an integral step towards conferment of degrees.
46. Consequently, aside all above, for this reason too, the so-called service of affiliation rendered by a university to its affiliated colleges squarely falls within the ambit of exempt services under Entry 66(a) as well as Entry 66(b)(iv).
RELIEF
47. D.B. CWP No.9556/2024 and all other writ petitions as per Appendix ‘A’ are allowed. Proposed levy and demand of GST on affiliation fee is held to be unsustainable in law. Impugned show cause notice dated 26.12.2023 issued by Office of Commissioner, Central Excise & CGST Commissionerate is quashed. It is also directed that subject to the verification that the burden of the GST on affiliation fee has not been fastened / recovered from the students by factoring it in the tuition fee, any amount of GST on affiliation fee already paid by the petitioner shall be refunded within four months, failing which the same shall also attract interest @ 7% per annum from the date of payment till refund.
In view of the above, the present petitions are also allowed mutatis mutandis.
A copy of this order be placed in all connected files.
All pending application(s), if any, shall stand disposed of.
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