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TMI Blog2023 (11) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... tutions assailing the demand notice raised by the 1st respondent-University so far as payment of G.S.T. on the affiliation fee and inspection fee together with arrears from July, 2017 onwards. 3. For proper appreciation of facts, it would be more relevant to take note of the contents of the demand notice issued by the 1st respondent to each of the petitioners in all the writ petitions, which is extracted as under : "With reference to the subject cited and vide references cited, the University has been directed by GST authorities to collect and deposit the GST dues from July, 2017 onwards on affiliation and inspection fees paid by private institutions affiliated to K.N.R.U.H.S. In this regard, you are hereby directed to submit 9% S.G.S.T. and 9% C.G.S.T. (a total of 18% as G.S.T.) on the affiliation and inspection fee paid to the University from July, 2017 onwards in the form of Demand Draft in favour of the Registrar, K.N.R.U.H.S. payable at Warangal within 10 days. Kindly note that the D.D.s are to be submitted separately for each financial year and also please provide the details of affiliation fee and inspection fee paid in a table form year-wise for each Financial Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent-University from the petitioner-educational institutions which has led to filing of the present writ petition. 10. At the time when the G.S.T. law was enacted, "Education Service" was one of the subjects which was taxable under the 'Heading No. 9992' as per notification dated 28.06.2017. Subsequently, there were certain categories of services provided by the educational institutions which stood exempted from levy of G.S.T. It is this exemption of levy of G.S.T. upon certain category of services rendered by the educational institutions as per notification No. 12 of 2017, dated 28.06.2017, which has been heavily relied upon by the petitioners praying for allowing of the writ petitions and quashment of the impugned demand notice raised by the 1st respondent-University for payment of G.S.T. 11. Learned counsel for the petitioners contended that perusal of Serial No. 66 of Notification No. 12 of 2017, dated 28.06.2017, would show that the services provided by an educational institution stands exempted from payment of G.S.T. He further contended that the term "educational institution" has been further defined in the same notification in Clause (y) of Section 2 of the G.S.T. Act. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also fall within the purview of 'educational institution' and as such the petitioners would also be exempted from levy of G.S.T. on the inspection fees and affiliation fees. 15. Learned counsel for the petitioners further contended that in the event, the said fees becomes amenable to G.S.T. and if the petitioners are made to pay G.S.T. on the inspection fees and affiliation fees, the petitioner-Colleges would be compelled to pass on the burden on the students who get admitted to the respective colleges of the petitioners. Thus, in terms of Serial No. 66 of the notification No. 12 of 2007, dated 28.06.2017, since it exempts so far as the services rendered by the educational institutions to the students, the petitioners should not be compelled to pay G.S.T. on the inspection fees and the affiliation fees. It would also be detrimental to the interest of the students who have meanwhile taken admission to the petitioner-Colleges. 16. Per contra, Mr. Dominic Fernandes, for Commercial Tax, for respondent Nos. 2 to 4, contended that the impugned demand notice is one which is in fact raised by the 1st respondent- University and the 1st respondent-University as such has not disputed or den ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. However, as regards issue of affiliation of educational institutions with the Universities and Boards, etc., it was resolved that the Circular issued by the Government of India, Ministry of Finance, Department of Revenue, dated 17.06.2021, would be governing the field. As per Clause (4)(iii) of the said Circular, G.S.T. @ 18% applies to such services provided by the Board or University so far as accreditation to education institutions is concerned. 20. Learned counsel for the respondent-Department further contended that the decisions rendered by learned Single Judge of the Karnataka High Court in The Presiding Officer and others (1 supra) and Chairman, Bhartia Education Society (2 supra) (as was strongly harped upon by the learned counsel for the petitioners) would not be applicable or come to the rescue of the petitioners as proper material papers were not brought before the said High Court at the time of disposal of the said writ petitions. That that the learned Single Judge had primarily relied upon Clause 66D of the Finance Act, 1994 which had the negative list of services upon which there would be no levy of tax. 21. The learned counsel for the respondent-Department furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the notification issued by the Government of India granting exemption to certain services, vide Notification No. 12 of 2017-Central Tax (Rate), dated 28.06.2017, at Serial No. 66, which again for ready reference is reproduced hereunder, viz., Notification No. 12/2017-Central Tax (Rate) New Delhi, the 28th June, 2017 G.S.R.... (E) - In exercise of the powers conferred by sub-section (1) of Section 11 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council, hereby exempts the intra-State supply of services of description as specified in column (3) of the Table below from so much of the central tax leviable thereon under sub-section (1) of Section 9 of the said Act, as is in excess of the said tax calculated at the rate as specified in the corresponding entry in Column (4) of the said Table, unless specified otherwise, subject to the relevant conditions as specified in the corresponding entry in Column (5) of the said Table, viz.:- Sl.No. Chapter, Section or Heading Description of Service Rate (per cent) Condition ... .. ... ... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the students for admission or any such purpose. Nowhere has the respondents declared or notified that charging of inspection fees and the affiliation fees by the 1st respondent-University also would fall within the exempted category. Under the taxing law, unless there is a specific exemption granted specifically on inspection fees and affiliation fees, the petitioners cannot be permitted to claim exemption drawing an inference of the affiliation and inspection fees both being part of the Notification No. 12 of 2017, dated 28.06.2017, and also being inter-linked to the curriculum which is undertaken by the educational institutions and the admissions derived therefrom. 29. The fact that the Notification No. 11 of 2017, dated 28.06.2017, has a broader subject when it prescribes education service and Notification No. 12 of 2017, dated 28.06.2017, specifically enumerates specific services which stand exempted and inspection and affiliation fees not reflected in the Notification No. 12 of 2017, dated 28.06.2017, the relief sought for by the petitioners or the issue raised by the petitioners would not be sustainable. Since there were certain handicaps and confusions prevailing, the G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich stood amended further vide Notification No. 2 of 2018, dated 25.01.2018, specifically enumerates the specific nature of service rendered by the educational institutions which would stand exempted. Inspection and affiliation fees however is not part of the said notification granting exemption. Yet another aspect which needs to be considered is that Notification No. 12 of 2017, dated 28.06.2017, provides for exemption of services rendered by the educational institutions to three different categories, i.e., students, faculty and staff. It does not deal with the services rendered by the university to the educational institutions. 'Affiliation' and 'inspection' is a service rendered by the university to the educational institutions for which the university had charged the respective educational institutions. 32. Surprisingly, in the instant case, as of now, the 1st respondent-University does not seem to be aggrieved of the demand raised by the respondent-Department so far as payment of G.S.T. on the inspection and affiliation fees is concerned. What is further necessary to be reflected at this juncture is that the nature of service rendered by the 1st respondent-University to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., (1990) 4 SCC 256 : 1990 SCC (Tax) 422], referred to therein - represents the correct view of law. The principle that in case of ambiguity, a taxing statute should be construed in favour of the assessee - assuming that the said principle is good and sound - does not apply to the construction of an exception or an exempting provision, they have to be construed strictly. A person invoking an exception or an exemption provision to relieve him of the tax liability must establish clearly that he is covered by the said provision. In case of doubt or ambiguity, benefit of it must go to the State." 50. In TISCO Ltd. v. State of Jharkhand [TISCO Ltd. v. State of Jharkhand, (2005) 4 SCC 272], which is another two-Judge Bench decision, this Court laid down that eligibility clause in relation to exemption notification must be given strict meaning and in para 44, it was further held : (SCC pp. 289-290) "44. The principle that in the event a provision of fiscal statute is obscure such construction which favours the assessee may be adopted, would have no application to construction of an exemption notification, as in such a case it is for the assessee to show that he comes within the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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