The Goa Bench of Bombay High Court has quashed the Goods and Service Tax (GST) demand against Goa University citing the education is non-commercial in nature.
The bench of Justice M. S. Karnik and Justice Nivedita P. Mehta has observed that the GST was proposed on the sale of prospectus, sale of old newspapers, various fees towards sports, eligibility certificate, migration certificate, admission fee etc., received from students are also taken for the purpose of demand.
The bench noted that where the main activity is not a business then any incidental or ancillary transaction held, would normally amount to business only if an independent intention to carry on business in the incidental or ancillary transaction is established. The burden to prove such intention rests on the Department. Hence, where the main and dominant activity of the University is education, it cannot be termed as business activity to demand tax.
The petitioner, Goa University has challenged a show cause notice issued by the Joint Commissioner of Central Goods and Service Tax (CGST), Goa Commissionerate, proposing to demand GST on the educational activities of the petitioner University.
The petitioner contended that the show cause notice was issued by department without jurisdiction as there is no jurisdiction under the legislation to charge GST on education related activities. The petitioner being a University set up under the Act by the State legislation does not fall under the ambit of ‘Government’ or ‘local authority’ and hence clause 2(17)(i) of the CGST Act, 2017 does not apply. The activities of the petitioner do not fall under the definition of business as set out in clause (a) to (c) of the Section 2(17) of the GST Act.
The petitioner contended that The educational activities not being commercial in nature are not amenable to GST as the activities do not qualify to be supply of services. The educational activities carried out while imparting education cannot be termed as business under Section 2(17) because the same is not a trade, commerce, manufacture, profession, vocation or adventure.
The court held that the university is also an educational institution and students of the university, including students studying through affiliated colleges. Thus, the activities of the university, insofar as it relates to levying of affiliation fees is exempt from GST. The Circular dated 11.10.2024 in its application to the Goa University where it is clarified that the affiliation services by universities to colleges are not by way of services related to the admission of students to such colleges or the conduct of examinations by such colleges, is erroneous.
Case Details
Case Title: Goa University Versus Joint Commissioner Of Central Goods And Service Tax
Case No.: Writ Petition No.723/2024
Date: 15th APRIL 2025
Counsel For Appellant: Raghuraman, Senior Advocate with Mr Gauravvardhan Nadkarni, Mr Jay Mathew, Mr B. Murthy, Mr Raghavendra C. R., Advocates
Counsel For Respondent: Asha Desai, Senior Standing Counsel
