University Affiliation Fees Are Exempt From GST as Granting Affiliation Is a Non-Taxable Statutory Function

By | July 23, 2026
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University Affiliation Fees Are Exempt From GST as Granting Affiliation Is a Non-Taxable Statutory Function

Issue

Whether affiliation fees collected by a university from an affiliated college are liable to GST, or if granting affiliation constitutes an exempt service/non-taxable statutory function under Entry 66 of Notification No. 12/2017-Central Tax (Rate).

Facts

  • Background: The petitioner-college was affiliated to Bikaner Technical University (BTU) for the academic sessions spanning 2018-2019 to 2022-2023.

  • Payment & Demand: The college had duly paid the required affiliation fees for the specified sessions to BTU.

  • GST Demand: BTU subsequently issued a letter demanding GST on the affiliation fees paid by the college.

  • Writ Petition: The petitioner-college filed a writ petition challenging the levy of GST, arraying BTU and GST authorities as respondents.

Decision

  • Statutory Function: Grant of affiliation by a university is a statutory and regulatory function and does not constitute a supply under the CGST/RGST Act [Para 3].

  • No Taxable Activity: Affiliation fees do not represent consideration for any taxable activity, and in any event, affiliation services are exempt under Entry 66 of Notification No. 12/2017-Central Tax (Rate) [Para 4].

  • Demand Set Aside & Refund Directed: The demand raised by BTU was set aside, and GST authorities were directed to refund any GST collected within four months, failing which interest at 7% per annum would be payable from the date of payment until refund [Para 5].

Key Takeaways

  • Statutory Functions Fall Outside “Supply”: Statutory and regulatory duties performed by state-established universities—such as granting affiliation—do not qualify as commercial/taxable supplies under Section 7 of the CGST Act.

  • Scope of Educational Exemption (Entry 66): Affiliation-related services provided by universities to educational institutions fall squarely under the exemption provided in Entry 66 of Notification No. 12/2017-CT (Rate).

  • Mandatory Refund with Interest: Unlawful collection of tax under illegal demands entitles the assessee to a full refund alongside statutory/compensatory interest if not refunded within the stipulated time.

HIGH COURT OF RAJASTHAN
Surendera Group of Institutions
v.
Union of India
MUNNURI LAXMAN and Anuroop Singhi, JJ.
D.B. Civil Writ Petition No. 7287 OF 2026
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 petitionercollege challenging the demand raised by respondent No.4 Bikaner Technical University, Bikaner (BTU) vide letter dated 06.09.2025 for payment of Goods & Service Tax (GST) on the affiliation fee collected by the University.
2. The fact which is not in dispute is that the petitioner-college is affiliated with the respondent No.4 BTU and the affiliation fee for the academic session of 2018-2019 to 2022-2023 has already been paid by the petitioner-college to the University.
3. 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. UOI [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. 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 dated26.07.2018, 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.”
The above mentioned legal position has not been disputed by the parties in the present writ petition.
4. The demand of GST by the respondent No.4 BTU, 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, 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.
5. In view of the above, the present petition is allowed with the aforesaid directions.
6. Pending application(s), if any, stand disposed of.