GST Cannot Be Imposed on University Affiliation Fee Exempted Under Notification No. 12/2017-CT

By | August 11, 2026
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GST Cannot Be Imposed on University Affiliation Fee Exempted Under Notification No. 12/2017-CT

Issue

Whether GST can be levied and collected on the affiliation fee paid by an affiliated college to the university (RUHS) for the assessment periods 2023-2024 to 2027-2028 under Heading No. 9962 / Section 9 of the Central Goods and Services Tax Act, 2017.

Facts

  • Affiliation & Fee Demand: The petitioner-college was affiliated with Rajasthan University of Health Sciences (RUHS) and paid a university affiliation fee.
  • Levy of GST: RUHS demanded GST on the university affiliation fee for the period covering AYs 2023-2024 to 2027-2028 under Heading No. 9962.
  • Writ Petition: The petitioner filed a writ petition challenging the levy, demand, and collection of GST on the affiliation fee.
  • Admitted Covered Position: Both parties conceded that the core legal issue was squarely covered by the binding Division Bench precedent in Rajasthan Technical University v. Union of India (D.B. CWP No. 9556 of 2024).

Decision

  • GST Demand Quashed: Applying the ratio of Rajasthan Technical University v. Union of India, the Court held that affiliation fees collected by a university are statutory levies exempt from GST under Entry 66 of Notification No. 12/2017-CT (Rate).
  • Direction to Refund: The GST authorities were directed to refund any GST already collected on the affiliation fee.
  • Interest on Delay: If the refund is delayed beyond four months, the Department is liable to pay interest at the rate of 7% per annum calculated from the date of payment until the date of actual refund.

Key Takeaways

  • Exemption Under Entry 66: Affiliation fees paid to universities form an integral part of the regulatory educational ecosystem and are exempt from GST under Entry 66 of Notification No. 12/2017-CT (Rate).
  • Binding Precedent: Issues directly covered by established High Court Division Bench decisions are to be disposed of in alignment with settled law without reopening settled ratios.
  • Mandatory Interest on Refund Delays: Failure by the GST authorities to process refunds within the mandated 4-month timeframe triggers a statutory/court-directed interest liability of 7% per annum on the withheld amount.
HIGH COURT OF RAJASTHAN
Surendera Dental College and Research Institute
v.
Rajasthan University of Health Science
MUNNURI LAXMAN and Anuroop Singhi, JJ.
D.B. Civil Writ Petition No. 2740 OF 2025
JULY  10, 2026
Gopi Ram Goyal for the Petitioner. Harshvardhan, Rajvendra Saraswat, Rishabh Dadhich, Jitesh Kumar Suthar and Mahaveer Bishnoi, AAG for the Respondent.
ORDER
1. The present writ petition has been filed by the petitioner-college challenging the demand raised by respondent No.1 –Rajasthan University of Health Science (RUHS) vide letter dated 09.12.2024 for payment of Goods & Service Tax (GST) on the affiliation fee collected by the University.
2. The other prayer is that since the affiliation is directed to be transferred from present University to another University for the academic session of 2025-2026 to 2027-2028, the University be directed to transfer the affiliation fee for such period to the other University.
3. The fact which is not in dispute is that the petitioner-college is affiliated with the respondent No.1 – RUHS for the academic session of 2023-2024 to 2027-2028, and the affiliation fee for the said period has already been paid by the petitioner-college.
4. The issue relating to collection of GST on the affiliation fee has already been adjudicated by a Co-ordinate Division Bench of this Court in Rajasthan Technical University v. Union of India [D.B. Civil Writ Petition No. 9556 of 2024, dated 23-2-2026], wherein it has been held that GST cannot be imposed upon the affiliation fee. This legal position has not been disputed by the parties in the present writ petition.
5. The operative portion of the order reads as under:
“43. As an upshot of the what is reasoned and discussed in the preceding part, it is held that grant of affiliation by a University is a statutory and regulatory function and does not constitute a supply of service under the CGST Act. Affiliation fees are not consideration for any taxable activity. Even otherwise, affiliation services are exempt under Entry 66 of Notification No. 12/2017-CT (Rate). Levy and collection of GST on affiliation fees is illegal and unsustainable.
44. Before we part, though we have already opined as above, but it bears reiteration, notwithstanding the views already recorded, that under the Affiliation Byelaws of the Central Board of Secondary Education, “affiliation” is expressly understood as an institutional arrangement enabling a school to prepare its students for admission to the Board examinations. A careful reading of the Bye-laws makes it abundantly clear that the conditions governing affiliation of schools with the Board are, in substance and effect, pari materia with those governing affiliation of colleges with a university. These conditions include adherence to the prescribed curriculum, maintenance of academic and infrastructural standards, and presentation of students for evaluation by the examining body.
44.1. Pertinently, by Revenue Notification No. 14/2018 dated 26.07.2018, a clarification was introduced in the parent Notification No. 12/2017 whereby Central and State Educational Boards were deemed to be “educational institutions” for the limited purpose of providing services by way of conduct of examinations to students.
45. Thus, in this backdrop, any attempt to deny universities similar treatment at par with Central and State Educational Boards is manifestly arbitrary and ex facie discriminatory, particularly when universities equally discharge the function of conducting examinations for students of affiliated colleges as an integral step towards conferment of degrees.
46. Consequently, aside all above, for this reason too, the so-called service of affiliation rendered by a university to its affiliated colleges squarely falls within the ambit of exempt services under Entry 66(a) as well as Entry 66(b)(iv).
RELIEF
47. D.B. CWP No.9556/2024 and all other writ petitions as per Appendix ‘A’ are allowed. Proposed levy and demand of GST on affiliation fee is held to be unsustainable in law. Impugned show cause notice dated 26.12.2023 issued by Office of Commissioner, Central Excise & CGST Commissionerate is quashed. It is also directed that subject to the verification that the burden of the GST on affiliation fee has not been fastened / recovered from the students by factoring it in the tuition fee, any amount of GST on affiliation fee already paid by the petitioner shall be refunded within four months, failing which the same shall also attract interest @ 7% per annum from the date of payment till refund.”
6. The demand of GST by the respondent No.1 – RUHS, is required to be set aside in the light of the above ratio and the respondents GST authorities are directed to refund the collected GST, if any, collected on the affiliation fee, within a period of four months from the date of this order, failing which, they are also liable to pay interest @ 7% per annum from the date of payment of GST, if any, till the date of refund.
7. So far as the prayer regarding the transfer of affiliation fee by the respondent No.1 to the petitioner is concerned, the same is beyond the jurisdiction of this Court, therefore, liberty is given to the petitioner to seek relief by way of filing an appropriate writ petition.
8. In view of the above, the present petition is partly allowed setting aside demand raised by the respondent No.1 – RUHS against the petitioner – college and given liberty to the petitioner to file appropriate writ petition to avail the relief with respect to transfer of affiliation fee.
9. Pending application(s), if any, stand disposed of.