The Central Goods and Services Tax (CGST) department has served a notice to the University of Mumbai (MU) seeking payment of a staggering ₹16.9 crore towards GST dues dating back to 2017. Other public universities in the state have also received similar notices seeking GST on affiliation fees with retrospective effect.
The development comes even as the Goa bench of the Bombay high court on Tuesday struck down the department’s attempts to levy GST on Goa University, saying education was a non-commercial activity that fell outside the ambit of the CGST Act.
Some universities in the state, including MU, have filed appeals with the GST commissioner, requesting an exemption. They have also approached the state government to seek relief from the tax burden.
On Friday, vice-chancellors of various affected universities met the state education minister to discuss the matter. One vice-chancellor, who spoke to HT on condition of anonymity, confirmed that the state government had assured them of taking up the matter with the Centre.
MU currently has over 850 affiliated colleges, each of which pays an affiliation fee to the university. The fees comprise a significant part of the university’s revenue and are often used to fund student welfare programmes.
The university has so far declined to comment officially on the CGST department’s bid to levy GST on affiliation fees. But sources in the university told HT that it was preparing to challenge the notice. The appeal will be submitted to the commissioner of Central GST and Central Excise, with the university arguing that as a government institution, it should be exempt from paying GST on affiliation fees, the sources said.
“We have only recently learned about GST notices being sent to universities across the state,” said MU senate member Pradeep Sawant. “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.”
‘Edu a non-commercial activity’
On Tuesday, the Goa bench of the Bombay high court struck down the CGST department’s attempt to levy GST on Goa University, saying ancillary activities of an institution imparting education could not be classified as ‘business’ unless the intention of conducting business through those activities was established independently.
The bench of justices MS Karnik and Nivedita P Mehta was hearing Goa University’s plea challenging the show cause notice issued by the Joint Commissioner, CGST, Goa Commissionerate. The notice proposed to levy GST on the university’s educational activities such as sale of prospectus and old newspapers and receipt of fees towards admission, sports, eligibility certificate and migration certificate.
The university contended that the CGST department had no authority under law to levy GST on its activities. The university was set up under a state legislation and did not fall under the ambit of government or local authority, which would attract taxation under clause 2(17)(i) of the CGST Act, 2017. The activities of the university also did not fall under the definition of business as set out in section 2(17) of the CGST Act, the university said in its plea.
The court held that the university was an educational institution which catered to students, including those studying in affiliated colleges. Hence, its activities, including the levying of various fees, were exempt from GST.
