Delhi HC Orders NBE to Refund Collected Tax Due to Incorrect GST Levy on Course Fees

Delhi High Court in a significant development rendered that the National Board of Examinations ( NBE ) refund the Goods and Services Tax ( GST ) collected from candidates, citing the erroneous imposition of GST on course fees.

The legal dispute emerged from notifications issued via the NBE dated January 15, 2021, February 15, 2021, and August 19, 2021, mandating the collection of GST at the rate of 18% from Diplomate of National Board ( DNB ) candidates including with their course fees.

NBE mentioned that “NBE receives several queries regarding submissions of the annual course fee. It is now clarified that the following annual course fee shall be applicable for all ongoing Broad Speciality ( DNB ), Super Speciality ( DrNB ), and Fellowship ( FNB ) trainees irrespective of the year of their joining”, thereby releasing the notice with 18% GST mandate for all ongoing Broad Speciality ( DNB ), Super Speciality ( DrNB ) and Fellowship ( FNB ) trainees.

The applicant, the Association of Diplomate of National Board Doctors & others contested the GST applicability to course fees before the Delhi High Court.

The court ruled that the notifications instructing the collection of GST on course fees were incorrect and mandated their withdrawal. Recognizing the error, the NBE was instructed to issue guidelines for promptly refunding the GST collected from candidates.

In adherence to the court’s directive, the NBE submitted an affidavit on October 25, 2023, revealing the number of affected candidates and detailing the transactions involved. The court observed that a portion of the GST collected remained with the NBE, while the majority had already been transferred to hospitals along with the course fees.

Kirtiman Singh, the counsel representing the NBE, stated on instructions that the contested notifications, specifically those seeking to collect GST on course fees, would be withdrawn through the issuance of a public notice. Both parties’ counsels have proposed additional directions to be issued by the court, which the court finds commendable. The petitioners urge that these directions be implemented within strict timelines, but the respondents express reservations in that regard.

Acknowledging the suggestion made by the council, it was directed as under:

i. If the NBE holds the GST amount, it shall promptly initiate the process of refunding it to the candidates from whom the GST was originally collected.

ii. If the GST amount has been transferred to hospitals and has not yet been submitted to the GST authorities, the respective hospitals must abstain from doing so. Instead, they should take immediate measures to refund the amount to the candidates from whom the GST was collected.

iii. In situations where the GST has already been remitted to the relevant GST authorities, the respective hospitals are required to take steps to apply for the refund of the GST in question.

The bench noted from the NBE’s filed affidavit that there are two to three transactions that have not been linked to specific candidates. The NBE is obligated to exert maximum effort in tracing these transactions back to the relevant candidates. Once the candidates are identified, the NBE must take necessary measures to ensure the prompt refund of the collected GST to them.

In the case, the GST is available with the NBE, it will be refunded to them immediately.

It was added that, in cases where the GST has been transferred to hospitals, it would abide by the directions as issued above.

Furthermore, the High Court emphasized the need for prompt processing of such applications by the relevant GST authorities. Upon receiving funds from the GST authorities, the respective hospitals should promptly reimburse the collected GST to the affected candidates.

Considering the above, the Division Bench of Justices Vibhu Bakhru and Amit Mahajan at the Delhi High Court concluded that no additional orders are necessary, except for restraining the National Board of Examinations (NBE) from further collection of GST as per the mentioned notification.

Case Title	Association of Diplomate of National Board Doctors & ANR VS National Medical Commission & ORS
Citation	W.P.(C) 10326/2021 & CM APPL. 31787/2021
Date	01.11.2023
Counsel For Appellant	Mr. Sourabh Gupta, Mr. Puneet Yadav Ms. Ananya Gupta, Mr. Ujjwal Choudhary Advocates
Respondent (R1)	Mr. T. Singhdev, Mr. Abhijit Chakravarty, Mr. Bhanu Gulati, Mr. Tanishq Srivastava, Mr. Aabhaas Sukhramani, Mr. Anum Hussain & Mis. Ramanpreet Kaur, Advocates for R-1
Delhi High Court	Read Order