The CGST department of the Maharashtra government has issued a notice to the University of Mumbai (MU), demanding payment of ₹16.9 crore in GST dues dating back to 2017. Additionally, other public universities in the state have received similar notices requiring payment of GST on affiliation fees, applied retroactively.
The recent development occurred as the Goa bench of the Bombay High Court struck down the department’s efforts to impose GST on Goa University. The court ruled that education is a non-commercial activity that falls outside the scope of the CGST Act.
Along with MU, some state universities have submitted appeals to the GST commissioner, asking for an exemption. They have approached the state government to ask for relief from the tax load.
The meeting between the education minister of the state and the vice-chancellors of various affected universities has been conducted to discuss the case. On the condition of anonymity, one vice-chancellor validated that the state government has assured them about taking up the case with the centre.
At present, MU has over 850 affiliated colleges, each of which pays an affiliation fee to the university. The fees include an influential portion of the university’s revenue and are sometimes utilised to fund the welfare programs of the students.
Till now, the university has refrained from commenting officially on the CGST department’s bid to impose GST on affiliation fees. The university, though, was preparing to contest the notice. Before the commissioner of Central GST and Central Excise, the appeal shall be filed with the university claiming that, as a government institution, it must not be levied with GST on affiliation fees.
“We have only recently learned about GST notices being sent to universities across the state,” MU senate member Pradeep Sawant cited. “We are urging the vice-chancellor to escalate the matter to higher authorities and secure an exemption. We also plan to write to the higher and technical education minister.”
Education is a Non-commercial Activity
The Goa bench of the Bombay High Court has overturned the CGST department’s attempt to impose GST on Goa University. The court ruled that the ancillary activities of an educational institution cannot be categorised as ‘business’ till there is clear evidence that the intention behind those activities is to conduct business.
The bench of justices MS Karnik and Nivedita P Mehta was hearing the appeal of Goa University contesting the SCN issued via the Joint Commissioner, CGST, Goa Commissionerate. The notice asked to impose the GST on the educational activities of the university, like the sale of prospectus and old newspapers, and receipt of fees for admission, sports, eligibility certificate, and migration certificate.
It was claimed by the university that the CGST department does not have any authority under law to impose the GST on its activities.
Read Also:- CBIC Sets 18% GST Rate on Affiliation Services to Colleges by Universities
The university was set up under a state legislation and does not come under the ambit of government or local authority, which shall draw taxation under clause 2(17)(i) of the CGST Act, 2017. University activities do not come under the business as cited in section 2(17) of the CGST Act, the university stated in its plea.
The court ruled that the university was an educational institution that catered to students, along with those studying in affiliated colleges. Therefore, its activities, along with imposing distinct fees, were not charged with GST.
