The Rajasthan High Court made an important decision regarding educational institutions. They have allowed a group of petitions from these institutions and reinforced their earlier ruling that universities should not charge GST on their affiliation fees.
The Biyani Shikshan Samiti, along with nursing colleges, pharmacy colleges, teacher training institutes, and several other educational institutions, submitted petitions. During the hearing, the legal representatives for all parties acknowledged that the issue had already been conclusively addressed by the Rajasthan High Court in the case of Rajasthan Technical University, Kota v. Union of India & Ors., which was decided on February 23, 2026.
The Court in that matter analysed whether granting affiliation to colleges amounts to a supply of service under the Central Goods and Services Tax Act, 2017. The previous ruling mentioned that affiliation is a statutory and regulatory function implemented by a university as part of its educational duties. It allows affiliated colleges to admit students, comply with an approved curriculum, conduct academic activities, and present students for examinations leading to degrees.
The Court had elaborated that the same activity could not be considered as trade, commerce or a commercial service only because the university collected an affiliation fee. It said that affiliation fees did not amount to taxable consideration. Affiliation is important for colleges, and no negotiation, bargaining, or choice comparable to an ordinary commercial transaction. The fee is a statutory levy and not a payment for a negotiated service.
The previous ruling stated that even if affiliation were considered as a service, it would be waived under Entry 66 of Notification No. 12/2017-Central Tax (Rate).
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The Division Bench, including Acting Chief Justice Sanjeev Prakash Sharma and Justice Maneesh Sharma, said that the issue in the current batch was covered by that ruling. The bench reproduced the earlier findings that GST on affiliation fees shall amount to indirect taxation of education and that executive circulars could not override the law or an exemption notification.
The previous ruling had set aside the GST demand and ordered a refund of tax paid earlier on affiliation fees, based on verification that the burden had not been passed on to students via tuition fees. Within four months, the refund was to be made with 7% interest per annum for the delay.
In view of the above, the present petitions are also allowed mutatis mutandis. It is directed that a copy of the order be placed in every pertinent file and the pending applications be disposed of.
| Case Title | Rajasthan HC’s Order in The Case of Biyani Shikshan Samiti vs Union Of India |
| Case No. | D.B. Civil Writ Petition No. 5708/2024 |
| For Petitioner | Ms. Naina Saraf Mr. Prateek Kedawat Mr. Khurshid Ahmed Khan |
| Rajasthan High Court | Read Order |
