[Order of the Hon'ble High Court of Karnataka, dated 24.11.2025, in WP. no. 100780 OF 2024 (T-Res)]
Following the decision dated 22.04.2025 of the Coordinate Bench in WP. no. 4254/2024(T-Res), wherein it was held that:
i) Activities of universities are not commercial in nature and cannot be termed as 'supply' in the course or furtherance of business;
ii) Income derived from students and colleges and other income incidental to the main functions of the University cannot be brought to tax under GST;
iii) As they perform public functions and are entrusted with a statutory duty in public interest, it cannot be said that the statutory functions carried out for a fee would constitute "consideration" under the GST legislations;
iv) Activities carried out by the universities are under the respective statutory provisions, which are in the nature of statutory/regulatory functions and the same cannot be termed as commercial in nature. Since the activities not being commercial or business in nature and the fee so charged not qualifying as consideration, the charging provisions under the GST law would not get attracted to the activities of the University;
v) If GST levy is fastened on the Universities, they would necessarily pass on the same to the colleges (being an indirect tax), and in turn colleges will pass on the same to the students. Therefore, the very object of exemption will stand defeated;
vi) The impugned Circulars dated 17.06.2021 and 11.10.2024 are contrary to the legal provisions and the express wordings of the exemption notification; and
vii) Affiliation fees, PG registration fees, admissions fees, convocation fees and other sums collected by the petitioners-Universities from the College/students would not be exigible/amenable to payment of GST;
the Hon'ble High Court of Karnataka quashed the impugned orders passed against the petitioner.