Goa University Vs Joint Commissioner of Central Goods And Service Tax (Bombay High Court)
Bombay HC order quashing GST demand raised on the fees collected by Goa University, such as affiliation, prospectus, and migration certificate charges
The Bombay High Court at Goa delivered a significant judgment quashing a Goods and Services Tax (GST) demand levied on Goa University’s fees, including affiliation, prospectus, and migration certificate charges. The court reasoned that Goa University, as a statutory body established under the Goa University Act, 1984, is fundamentally engaged in discharging the State’s constitutional obligation to provide education. Consequently, the court determined that the University’s activities, particularly the collection of these statutory fees, are not commercial in nature.
The High Court further clarified that the fees collected by the University do not qualify as “consideration” as defined under Section 7 of the Central Goods and Services Tax (CGST) Act, 2017. It emphasized that these charges are statutory and regulatory requirements rather than payments made under a contractual arrangement for services rendered in a business context. The court also ruled that Goa University meets the criteria of an “educational institution” as specified under Notification No. 12/2017-CT (R) dated June 28, 2017, which provides exemptions for certain educational services. In its analysis, the Bombay High Court was critical of circulars issued by the Central Board of Indirect Taxes and Customs (CBIC), finding them to be inconsistent with the statutory provisions of the GST Act and unduly restrictive in their interpretation of the exemption notification. The court highlighted that these circulars incorrectly assumed affiliation and accreditation activities constituted a taxable supply of service without proper legal justification. The court also noted that a previous service tax demand on the University’s affiliation fees had been dropped, and reopening the issue under GST, based on the same facts, was not permissible. The judgment relied on several precedents, including rulings from the Supreme Court and other High Courts, which underscored the non-commercial nature of educational activities and the limitations on imposing taxes on statutory functions and fees related to education.
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