Surendera Group of Institutions Vs Union of India (Rajasthan High Court)
The Rajasthan High Court allowed the writ petition filed by the petitioner college challenging the demand raised by Bikaner Technical University (BTU) through its letter dated 06.09.2025 requiring payment of Goods and Services Tax (GST) on affiliation fees collected by the University.
It was undisputed that the petitioner college was affiliated with BTU and had already paid the affiliation fees for the academic sessions 2018-2019 to 2022-2023.
The High Court noted that the issue of levy of GST on university affiliation fees had already been decided by a Coordinate Division Bench in Rajasthan Technical University Versus Union of India & Ors. In that decision, the Court held that the grant of affiliation by a university is a statutory and regulatory function and does not constitute a supply of service under the Central Goods and Services Tax Act. It further held that affiliation fees are not consideration for any taxable activity. The earlier judgment also held that affiliation services are exempt under Entry 66 of Notification No. 12/2017-CT (Rate).
The Coordinate Bench had also observed that, under the affiliation bye-laws of the Central Board of Secondary Education, affiliation is an institutional arrangement enabling schools to prepare students for Board examinations, and that the conditions governing school affiliation are substantially similar to those governing affiliation of colleges with universities, including compliance with prescribed curriculum, academic standards and infrastructural requirements.
The earlier judgment further referred to Revenue Notification No. 14/2018 dated 26.07.2018, which introduced a clarification in Notification No. 12/2017 treating Central and State Educational Boards as educational institutions for the limited purpose of providing examination-related services. It held that denying similar treatment to universities would be arbitrary and discriminatory when universities also conduct examinations for students of affiliated colleges as an integral part of awarding degrees. Accordingly, the Coordinate Bench concluded that affiliation services rendered by universities fall within the exempt services covered by Entry 66(a) as well as Entry 66(b)(iv) of Notification No. 12/2017-CT (Rate).
The Coordinate Bench had consequently held the proposed levy and demand of GST on affiliation fees to be unsustainable in law, quashed the impugned show cause notice, 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 should be refunded within four months, failing which interest at 7% per annum would be payable from the date of payment until refund.
The High Court recorded that the legal position laid down in the earlier judgment was not disputed by the parties in the present writ petition. Applying that decision, it held that the demand raised by BTU for payment of GST on affiliation fees was liable to be set aside.
The Court directed the GST authorities to refund any GST collected on the affiliation fees within four months from the date of the order. It further directed that, in case of failure to refund within that period, interest at 7% per annum would be payable from the date of payment of GST until the date of refund.
The writ petition was accordingly allowed with the above directions, and all pending applications stood disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF RAJASTHAN HIGH COURT
1. The present writ petition has been filed by the petitioner college challenging the demand raised by respondent No.4 Bikaner Technical University, Bikaner (BTU) vide letter dated 06.09.2025 for payment of Goods & Service Tax (GST) on the affiliation fee collected by the University.
2. The fact which is not in dispute is that the petitioner-college is affiliated with the respondent No.4 BTU and the affiliation fee for the academic session of 2018-2019 to 2022-2023 has already been paid by the petitioner-college to the University.
3. The issue relating to collection of GST on the affiliation fee has already been adjudicated by a Co-ordinate Division Bench of this Court in D. B. Civil Writ Petition No.9556/2024 titled as Rajasthan Technical University Versus Union of India & Ors., wherein it has been held that GST cannot be imposed upon the affiliation fee. The operative portion of the order reads as under:
“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 dated26.07.2018, 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.”
The above mentioned legal position has not been disputed by the parties in the present writ petition.
4. The demand of GST by the respondent No.4 BTU, is required to be set aside in the light of the above ratio and the respondents GST authorities are directed to refund the collected GST, if any, on the affiliation fee, within a period of four months from the date of this order, failing which, they are also liable to pay interest @ 7% per annum from the date of payment of GST, if any, till the date of refund.
5. In view of the above, the present petition is allowed with the aforesaid directions.
6. Pending application(s), if any, stand disposed of.
