Principal Additional Director General Directorate General of GST Intelligence Bengaluru Zone Unit Vs Rajiv Gandhi University of Health Sciences (Karnataka High Court)
Whether affiliation fees charged by Universities from colleges affiliated to it is liable for payment of service-tax and also whether rental income for rent received from Buildings for use as bank and/or canteen is liable for service tax?
The Division bench of Karnataka high court in this case was dealing with a question as to whether the respondent University is an educational Institution and is thus not liable to pay service on the affiliation fees charged from the colleges affiliated to it and also for the rental income earned on the buildings rented by it for banking and canteen.
The court noted the history of service tax legislation in India as well as etymological advertence to the concept of University by taking cue from Bhagwad Gita and also dealt with the nature and functions of the universities vis-a-vis educational institutions and noting that affiliation creates a kind of cord between affiliating body and the affiliated entity held that the university is an educational institution rendering services in relation to the education recognised by law and thus service tax is not leviable on the affiliation fees collected by such universities.
