2022 (12) TMI 1100 - AAR - GST

Levy of GST - Supply of service or not - services provided by the University of Kola relating to affiliation granted to colleges for imparting education - amount collected by way of affiliation fee are exempted vide S. No 66 of Notification No.12/2017-CT (Rate) dated 28.06.2017 or not - HELD THAT - The amendment was proposed to exempt services relating to admission to or conduct of examination for admission to all educational institutions as defined in the notification (definition 2(y) of Notification No. 12/2017-CT(R)). Thus the entry at 66(b)(iv) seeks to exempt only those services provided to such institution in relation to admission of students or conduct of examination for such admission to all the educational Institutions including the higher educational institutions which were not exempted up to this amendment. On examination of clarification in Circular No. 177/09/2022-TRU we don t found that affiliation fees so collected by applicant from its affiliated colleges is exempt. Further we would like to refer Circular No. 151/07/2021-GST dated 17.06.2021 regarding Clarification regarding GST on supply of various services by Central and State Board (such as National Board of Examination) wherein it is clarified at SI.4 (iii) that 18% GST will be applied to other services. In the case at hand it is evident that the affiliation services provided by the applicant enables the said institution to conduct the course/programme and do not relate to admission of students to such course/programme in the said institutions or conduct of examination for such admission in the said institution. Also the exempted services on the conduct of examination is that related to the admission to such institution and not related to the examination based on which degree/title etc are conferred to the students as is being claimed by the applicant though we do not part any opinion on the claim of the applicant that they extend such services to the institutions by extending the affiliation - affiliation fees so collected by the applicant is not exempted under the entry SI.No.66 of Notification No. 12/2017-C.T.(Rate) dated 28.06.2017 as amended.

Summary

Issues Involved:

1. Whether the services provided by the University of Kota relating to affiliation granted to colleges for imparting education is a supply of service liable to levy of GST under the CGST Act, 2017.
2. Whether the amount collected by way of affiliation fee is exempted vide S.No 66 of Notification No. 12/2017-CT (Rate) dated 28.06.2017.

Issue-wise Detailed Analysis:

1. Whether the services provided by the University of Kota relating to affiliation granted to colleges for imparting education is a supply of service liable to levy of GST under the CGST Act, 2017:

The applicant, University of Kota, contended that it is a government-established university engaged in providing educational services, including granting affiliation to various colleges. The university argued that affiliation is a statutory function and an integral part of providing educational services, which should be exempt from GST. The university emphasized that affiliation fees are part of the fees received towards providing recognized courses and degrees to students, thus falling under the exemption for educational services as per Notification No. 12/2017-CT (Rate) dated 28.06.2017.

The Authority for Advance Ruling (AAR) examined the submission and relevant provisions. It noted that the affiliation services provided by the university enable colleges to conduct courses and do not directly relate to the admission of students or the conduct of examinations. The AAR referred to the definition of affiliation, which involves recognizing a college to conduct courses and ensuring it meets the required standards. The AAR concluded that the affiliation services are not directly related to the admission of students or the conduct of examinations, and therefore, do not fall under the exemption provided in the notification.

2. Whether the amount collected by way of affiliation fee is exempted vide S.No 66 of Notification No. 12/2017-CT (Rate) dated 28.06.2017:

The applicant argued that the affiliation fees collected should be exempt from GST as they are part of the educational services provided by the university. The university cited various judicial pronouncements and circulars to support its claim that services related to education are exempt from GST. The AAR examined the relevant provisions and amendments to the notification. It referred to the exemption under S.No 66 of Notification No. 12/2017-CT (Rate) dated 28.06.2017, which exempts services provided by educational institutions to their students, faculty, and staff, as well as services related to admission or conduct of examinations.

The AAR noted that the amendment made on 25.01.2018 expanded the exemption to include services related to admission or conduct of examinations for all educational institutions. However, the AAR clarified that the exemption applies only to services directly related to the admission of students or the conduct of examinations for admission. The affiliation services provided by the university, which involve recognizing and approving colleges to conduct courses, do not fall under this exemption.

Conclusion:

The AAR ruled that the affiliation services provided by the University of Kota to its constituent colleges are a supply of service liable to GST. The affiliation fees collected by the university are not exempted under S.No 66 of Notification No. 12/2017-CT (Rate) dated 28.06.2017, as amended. The ruling emphasized that the affiliation services are not directly related to the admission of students or the conduct of examinations, and therefore, do not qualify for the exemption provided in the notification.