2026-VIL-418-BOM
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SGST High Court Cases

GST - Levy of GST on Affiliation Fees collected by University – Petitioner argued that the collection of affiliation fees was a statutory function and not a commercial activity, and hence, not amenable to GST - Whether the collection of affiliation fees by the statutory University would attract the levy of GST – HELD – Considering the nature of the statutory activities being undertaken by the University and in relation thereto, collecting of the affiliation fees cannot be held to be a form of supply of any service of the nature as contemplated in clause (a) of Section 7(1) of the CGST Act, 2017 - The collection of affiliation fees by the University is a statutory and regulatory function, and not a commercial activity falling within the purview of the term "supply" under Section 7 of the CGST Act, 2017. The University is established under a State legislation with the primary objective of disseminating education and not engaging in any business activities. The settled principles of law is, wide meaning needs to be attributed to the term "education" and that the activities of a Statutory University cannot be categorized as "business activities" for the purpose of GST. Once such activity itself is not ‘supply’ and/or it is not business within the meaning and purview of sub-section 1(a) of Section 7, there is no question of the charging provision being applicable. As a sequel thereto, once Sections 7 and 9 itself are not applicable, the proper officer would not have jurisdiction to issue show cause notice under section 74 of CGST Act – Further, the fees collected by the University, such as affiliation fees, are not in the nature of "consideration" as envisaged under the CGST Act, as there is no element of contractual relationship or quid pro quo involved - The Court relied on the decisions of the High Courts of Karnataka, Goa and Rajasthan, which have held that the collection of affiliation fees by universities is a statutory and regulatory function, and not a taxable activity under the GST laws. The proper officer acted without jurisdiction in issuing the show cause notice and passing the order-in-original demanding GST on the affiliation fees collected by the University - The impugned order-in-original and the rectification order are set aside and the writ petition is allowed
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