The Karnataka High Court has held that service tax cannot be levied on the income accruing on account of affiliation by a university.
The bench of Justice Jyoti Mulimani has observed that the authorities concerned are not justified in levying service tax on the income accruing on account of affiliation during the academic year July 2012 to March 2017 and April 2017 to June 2017. Therefore, the show cause notices issued by the authorities concerned are liable to be set aside.
Background
The petitioner/assessee, Visvesvaraya Technological University has challenged a show cause notice was issued demanding service tax amounting to Rs.2,29,84,152 inclusive of cesses, for providing of taxable service during the period from July 2012 to March 2017 on the taxable value of Rs.19,33,99,442/- and another show cause notice was issued demanding service tax amounting to Rs.10,90,142 (inclusive of cesses), for providing of taxable service during the period from April 2017 to June 2017.
The petitioner has relied on the decision of Principal Additional Director General, Directorate General Of Gst Intelligence, Bengaluru Zone Unit And Others Vs. M/S.Rajiv Gandhi University Of Health Sciences in which it was held that affiliation fee collected by the University cannot be considered as a consideration for providing educational services.
Conclusion
The court while allowing the petition has quashed the show cause notice d issued by the Additional Director General, Directorate General of GST Intelligence, Belagavi Zonal Unit, Belagavi and Assistant Commissioner of Central Tax and Central Excise, Belagavi City Division, Belagavi.
Case title: M/S. Visvesvaraya Technological V/S Additional Director General
Citation: Writ Petition No. 105066 Of 2018 (T-Tar)
Counsel for the Petitioner: Smt. Bhanu Murthy.J.S.
Counsel for the Respondent: Sri. Girish. S. HulmaniÂ
Date of Decision: 22/08/2024
