The Bombay High Court in Goa has decided that the fees charged by Goa University from the colleges it works with do not have to include Goods and Services Tax (GST). This is because the court found that the university’s activities are not focused on making a profit.
A division bench consisting of Justices M.S. Karnik and Nivedita Mehta has quashed and set aside a show cause notice issued by the Joint Commissioner of Central Goods and Services Tax. The notice proposed to demand GST on the affiliation fees from the GU.
The Joint Commissioner requested the university to explain why a GST of Rs 4.84 crore on a taxable value of Rs 27.45 crore should not be demanded and collected, along with interest and penalties.
“…where the main and dominant activity of the University is education, it cannot be termed as business activity to demand tax,” the court stated.
Incomes like rent or licence fees received by teachers or staff are waived from tax since they are residential and services rendered to faculty, as per the Bombay High Court. The court added that GST has already been remitted and reported in the returns concerning the rent obtained from third parties for setting up kiosks and others.
“The university has reported income in the income and expenditure account, and its schedules and sub-schedules have been listed. The GST is demanded on the same without establishing how these incomes would be liable to GST,” the high court expressed. “The GST is proposed on the sale of prospectus, sale of old newspapers, various fees towards sports, eligibility certificate, migration certificate, admission fee, etc, received from students are also taken for the purpose of demand.”
HC noted that the affiliated colleges are not permitted to admit students for courses without affiliation from the Goa University. It is grounded in this affiliation that colleges conduct courses and examinations and award degrees to students.
“Further, the examination is conducted by the Goa University, which in turn leads to the award of degrees to the students. Hence, the fees collected from colleges are clearly covered by the exemption notification. The activity of Goa University in collecting the affiliation fees is exempt from GST, and hence the fees collected by the Goa University are not liable to tax,” the high court cited.
To nearly 67 colleges, the university has allotted affiliation. The Goa University approaches the High Court, contesting the Show Cause Notice (SCN) of the Joint Commissioner of Central Goods and Services Tax and asking for GST on its educational activities.
| Case Title | Goa University vs Joint Commissioner Of Central Goods And Services Tax |
| ITAT No. | Writ Petition No.723/2024 |
| Counsel For Appellant | Mr Raghuraman, Mr Gauravvardhan Nadkarni, Mr Jay Mathew, Mr B. Murthy, and Mr Raghavendra C. R. |
| Counsel For Respondent | Ms Asha Desai |
| Bombay High Court | Read Order |
