Sree Ramu College of Arts and Science Vs Authority for Clarification and Advance Ruling (Madras High Court)
By a common order, the Madras High Court disposed of four writ petitions concerning the taxability of affiliation-related services under the GST regime.
Two colleges affiliated to Bharathiyar University challenged the ruling dated 19.11.2020 passed by the Authority for Clarification and Advance Ruling (ACAR) under Section 97 of the CGST Act, 2017. The ruling held that the composite supply involving sale of application forms, registration of courses, inspection fees, affiliation fees, continuation fees, increase in intake processing fees, and penal fees, with “affiliation” as the principal supply, was not exempt under Sl. No. 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017 as amended by Notification No.2/2018-CT (Rate) dated 25.01.2018.
Two universities challenged a show cause notice dated 28.06.2022 and an Order-in-Original dated 05.05.2022 respectively. The Court dismissed the challenge to the show cause notice as premature and held that the order-in-original must be challenged through statutory appeal under Section 107 of the GST Act, 2017.
The colleges contended that Entry 66(b)(iv) of Notification No.12/2017-CT (Rate) exempted services “relating to admission to, or conduct of examination by” an educational institution. They argued that affiliation was intrinsically connected to admission and examination, as colleges could not admit students or conduct examinations without affiliation. They further submitted that the amendment by Notification No.2/2018-CT (Rate) deleting the words “up to higher secondary” expanded the exemption and did not restrict it.
