Principal Vs Union of India (Rajasthan High Court)
The Rajasthan High Court considered a challenge to an order dated 08.07.2026 directing the petitioner to deposit GST on affiliation fees as a pre-condition for renewal of affiliation for the academic session 2025–2026. The petitioner contended that the proposed GST levy and demand on affiliation fees was unsustainable and that affiliation did not constitute a taxable service.
At the outset, the parties agreed that the controversy had already been decided by the Rajasthan High Court in Rajasthan Technical University v. Union of India, judgment dated 23.02.2026. In that judgment, the Court held that grant of affiliation by a University is a statutory function and does not constitute a “supply of service” under Section 7 of the CGST Act. It further held that affiliation fees are a statutory levy rather than consideration for a negotiated service, as affiliation is compulsory and involves no choice, bargaining or reciprocity.
The earlier judgment also held that, even assuming affiliation to be a service, it is covered by the exemption under Entry 66 of Notification No. 12/2017-CT (Rate), as affiliation is connected with curriculum approval, student admissions, examinations and conferment of degrees. The Court held that circulars or executive clarifications cannot override statutory provisions or exemption notifications and concluded that levy of GST on affiliation fees was without authority of law.
The Court additionally referred to the affiliation framework applicable to schools and observed that the conditions governing school affiliation were, in substance and effect, comparable to those governing college affiliation with a university. It also noted Revenue Notification No.14/2018 dated 26.07.2018, which clarified the treatment of Central and State Educational Boards as educational institutions for specified examination-related services.
In the earlier judgment, the Court had allowed the writ petitions, held the proposed GST levy and demand on affiliation fees unsustainable, and quashed the show cause notice dated 26.12.2023. It also directed refund of GST already paid, subject to verification that the GST burden had not been recovered from students through tuition fees, with interest at 7% per annum if refund was delayed beyond four months.
In the present matter, the Rajasthan High Court disposed of the writ petition in terms of the earlier judgment. All pending applications were also disposed of.
Cases Discussed
- Rajasthan Technical University v. Union of India (Rajasthan High Court), D.B. CWP 9556/2026
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
Under challenge herein is the order dated 08.07.2026 passed by Respondent No. 4, whereby the petitioner has been directed to deposit GST on the affiliation fee as a pre-condition for the renewal of affiliation for the academic session 2025–2026. The petitioner contends that the proposed levy and demand of GST on affiliation fee is unsustainable in law. The affiliation does not fall under the category of taxable service, is the contention.
2. At the very outset learned counsels for the parties are ad idem that the controversy raised herein has already been put to rest vide another judgment of this court dated 23.02.2026 in Rajasthan Technical University v. Union of India1, whereby it has been held as under:-
“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 fora 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 he 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.”
3. In view of the aforesaid, the present writ petition is disposed of in terms of the judgment,
4. All pending applications stand disposed of.
Notes:
1 D.B. CWP 9556/2026
