MADURAI: Government-aided and private engineering and arts and science colleges across the state have raised concerns over the levy of 18% GST on affiliation and certain university fees, urging universities to provide relief on what they contend are statutory and regulatory payments rather than taxable services
Universities, including Madurai Kamaraj University (MKU) and Anna University, are collecting 18% GST on affiliation fees and certain research-related fees from government-aided and self-financing colleges. They also question the applicability of the tax, particularly on fees pending from the pre-GST period.
Speaking to TNIE on condition of anonymity, a secretary of a government-aided college (Madurai) said, GST was applicable under Section 7 of the act only to a ‘supply’ made in the course or furtherance of business. Since universities established under statutes perform regulatory and statutory functions, the granting of affiliation should not, according to the colleges, be treated as a taxable supply.
The college representative pointed to recent judicial pronouncements, including those of the Karnataka, Bombay and Rajasthan High Courts, which have questioned the applicability of GST on affiliation fees. Though courts have taken divergent views, colleges said the emerging legal position increasingly recognises the non-commercial nature of affiliation granted by statutory universities.
A senior official from Mother Teresa Women’s University confirmed that the university was also collecting GST on fees pending from the pre-GST period. She said the varsity was compelled to collect the tax as failure to do so could invite audit objections.
Authorities from several engineering colleges also confirmed that they were facing the same issue. An official said conflicting judicial rulings had added to the confusion, pointing out that while a recent Madras High Court judgment held affiliation fees to be taxable, the Delhi Customs, Excise and Service Tax Appellate Tribunal (CESTAT) had earlier ruled in favour of universities.
“This shows that the universities here may not have presented the matter properly. Ultimately, the additional financial burden is passed on to the students,” he said.
When the issue of GST, the conflicting judicial orders and the universities’ failure to pursue the matter before the CESTAT or Madras High Court was brought to the attention of the Deputy Secretary of Higher Education, she assured that the issue would be examined.
A senior official of the GST department, meanwhile, said educational institutions were not required to pay GST on affiliation fees that were pending prior to the implementation of GST in 2017. The official said the Tamil Nadu government and various judicial pronouncements had provided exemptions or relaxations to universities in this regard.
“Each university should present its case and seek appropriate exemptions before the Madras High Court or CESTAT. If university authorities are unable to handle such matters, they should consider engaging professional consultants to ensure the issues are dealt with appropriately and in the best interests of the institutions and students,” the official said.
