The Central Board of Indirect Taxes and Customs ( CBIC ), vide circular no. 234/28/2024-GST on 11th October 2024, has explained that an 18% Goods and Services Tax ( GST ) applies to affiliation services furnished via universities to colleges. These affiliation services are waived from the GST notification No. 12/2017-CT(R) on 28.06.2017
GST applicability on affiliation service furnished via universities to colleges.
Affiliation services consist of an assessment by universities to establish if colleges fulfil the required criteria for offering degree programs.
These criteria include evaluating the institution’s infrastructure, like available space, technical capabilities, financial stability, and faculty qualifications. The affiliation process guarantees that colleges possess the necessary resources to provide high-quality education and comply with the standards established by universities.
From activities related to student admissions or the administration of examinations at the colleges, the affiliation services furnished via universities are not the same. The major operation of such services is to track and validate the capacities of the educational institutions instead of directly streamlining the student registration or examination processes.
As per this dissimilarity, the 54th GST council meeting suggested that the affiliation services proposed via the universities are not counted under the exemptions listed in Notification No. 12/2017-CT(R) dated June 28, 2017. Hence, universities need to revise an 18% GST on the fees towards the affiliation services provided to their constituent colleges.
The CBIC explains that “Thus, as recommended by the 54th GST Council, it is hereby clarified that the affiliation services provided by universities to their constituent colleges are not covered within the ambit of exemptions provided to educational institutions in the notification No. 12/2017-CT(R) dated 28.06.2017 and GST at the rate of 18% is applicable on the affiliation services provided by the universities.”
GST Applicability on the service of affiliation furnished by Central and State educational boards or Councils, or other similar bodies, to schools:
CBIC mentioned that affiliation services furnished before the schools via Central or State educational boards or councils, or other similar bodies via whatever name called are obligated to tax. As per the council’s suggestion, the GST payment on the services of affiliation furnished via Central and State educational boards or Councils, or other similar bodies, to all schools is regularised on an ‘as is where is’ basis for the duration 01.07.2017 to 17.06.2021.
The affiliation comprises tracking and ensuring that schools satisfy basic needs like infrastructure, financial stability, and faculty strength to operate under the respective boards or councils. These services do not relate to student admissions or examination conduct.
it was recommended in the 54th GST Council meeting, that all affiliation services furnished before schools by Central or State educational boards, councils, or similar entities be levied to tax.
Though, services rendered to government schools designated or regulated by government authorities will be waived from GST, effective October 10, 2024, under notification No. 08/2024-Central Tax (Rate).
