Navigating GST Challenges: Public Universities in Maharashtra

Navigating the Challenges of GST on Affiliation Fees for Public Universities in Maharashtra

Public universities in Maharashtra are currently grappling with challenges related to the Goods and Services Tax (GST) on affiliation fees. Recent correspondence from GST authorities has sparked concerns among these institutions, prompting them to seek assistance from the state governor. This article examines the complexities surrounding the GST implications on affiliation fees and delves into the proactive measures universities are taking to address this issue.

Seeking Support from the State Governor

In response to the scrutiny from GST authorities, public universities in Maharashtra have reached out to the state governor, who also serves as their chancellor. They argue that imposing GST on colleges for affiliation fees would inevitably lead to increased financial burdens on students.

Advocacy Efforts with the GST Council

During a recent meeting of the Joint Board of Vice-Chancellors (JBVC) in the state, university representatives expressed their concerns to Governor Ramesh Bais. Both the government and the governor’s office have committed to advocating on behalf of the universities before the GST council.

Taxation on Educational Services

While direct educational services provided to students, such as entrance exam fees, are exempt from taxation, the GST council has determined that an 18% GST would apply to other services offered by boards, including accreditation fees.

Dispute Over Affiliation Fees

University officials contend that they do not collect accreditation fees from colleges but are under investigation for affiliation fees, which they argue are solely for educational purposes.

Requests for Information and University Anxiety

GST authorities have issued letters requesting detailed information on affiliation and related fees from July 2017 to March 2023. This sudden request, coupled with personal summonses by local officials in some instances, has caused anxiety among all universities.

Insight from University Finance Officer

A university finance officer clarifies that affiliation fees charged to colleges encompass the educational services provided by universities, such as curriculum development, examination administration, and degree conferment.

Government’s Stance

A government official notes that the GST Council had previously addressed the issue of GST on services offered by educational boards, leading to a circular in June 2021 specifying that 18% GST applies to accreditation fees.

Expert Opinion and Hope for Resolution

Indirect tax expert Sunil Gabhawalla argues that affiliation and accreditation are distinct, advocating for GST exemption on educational services based on relevant court decisions. Despite conflicting rulings, stakeholders in the education sector and tax professionals remain hopeful that the GST Council will promptly resolve this issue.

Conclusion

The ongoing debate surrounding GST on affiliation fees underscores the intricate nature of taxation within the education sector. While universities advocate for exemption based on the educational nature of these fees, GST authorities emphasize compliance with taxation regulations. As discussions and advocacy efforts continue, there is optimism for a swift resolution that addresses the concerns of public universities in Maharashtra and provides clarity on GST regulations in the education domain.