Facts of the Case:

In this case, the Bharathidasan University challenged notices of intimation of liability issued under Section 74(5). Separate notices were issued for the financial years 2019–2020, 2020–2021, 2021–2022 and 2022–2023, alleging that the affiliation fees collected by the University from colleges affiliated to it were liable to GST along with interest and penalty. The Department contended that affiliation services are not services provided to students in connection with admission or conduct of examination and therefore do not fall within the exemption granted under Entry 66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. According to the Department, affiliation is an independent regulatory activity and hence taxable. The University, on the other hand, argued that it is an “Educational Institution” within the meaning of the notification and that affiliation is a prerequisite for colleges to admit students and conduct examinations. It was contended that affiliation is intrinsically connected with the process of admission and examination and therefore qualifies as a service relating to admission or conduct of examination, which is exempt.

Issue:

Whether affiliation fees collected by a University from colleges fall within the exemption under Entry 66 of Notification No. 12/2017-CTR as services relating to admission or conduct of examination by an educational institution, or whether such fees are liable to GST. 

Held That:

The Division Bench held that affiliation fees collected by Universities are taxable and do not fall within the exemption granted under Entry 66 of Notification No. 12/2017-CTR. The Court observed that exemption notifications in fiscal statutes must be interpreted strictly, and the language of Entry 66 clearly exempts only services provided by an educational institution to its students, faculty and staff, and services relating to admission to or conduct of examination by such institution. The Court held that affiliation is a regulatory function carried out by the University to assess whether a college has adequate infrastructure, faculty and facilities before permitting it to function under its aegis. Affiliation is a prerequisite to enable a college to admit students, but it is not itself a service relating to admission or conduct of examination. Admission of students commences only after affiliation is granted, and therefore affiliation is anterior and independent of admission and examination.

The Court further observed that subsequent clarificatory circulars issued by the Government and the insertion of a specific exemption (Entry 66A) for affiliation services provided to Government schools indicate legislative intent that affiliation services are otherwise taxable. The Court rejected the purposive and extended interpretation adopted in the earlier judgment and held that regulatory control over intake capacity does not convert affiliation into a service relating to admission.

Accordingly, the reference was answered by holding that affiliation charges collected by Universities from colleges are amenable to levy of GST. The matters were remitted back to the learned Single Judge for consideration of other grounds, if any.

Case Name: Bharathidasan University, Rep. By its Registrar, Palkalaiperur Versus The Joint Commissioner of GST (ST-Intelligence) Trichy Division, Tiruchirappali, The State Tax Officer, Tiruchirapalli dated 10.02.2026