Applicability of GST on Composite Supply of sale of Application, Registration, Inspection of affiliated institutions as the 'Principal Supply' says AAR

Applicability of GST on Composite Supply of sale of Application, Registration, Inspection of affiliated institutions as the 'Principal Supply' says AAR

Authority for Advance Rulings (AAR) said that GST would be applicable on composite supply of sales of application, registration, inspection, etc. on affiliated institutions and courses as the 'Principal supply'

The applicant is a University established under the Bharathiyar University Act. The applicant undertakes activities related to the affiliation of colleges as affiliated, professional or postgraduate colleges under conditions prescribed and to withdraw affiliation from colleges; to approve colleges providing course of study for admission to the examinations for titles and diplomas of the University under conditions prescribed and to withdraw such approval; to designate any college as an autonomous college with the concurrence of the Government in the manner and under conditions prescribed and to cancel such designation and collect various fees in this regard from the institutions.

The applicant alleged that in the Pre-Goods & Service Tax regime (GST), a demand of Service Tax was issued on the fees for which the eligibility of exemption under Sl.No.66 of Notification No. 12/2017-C.T.(R) is sought before AAR.

According to Section 98 proviso of the Goods & Service Tax (GST)Act, the Authority shall not admit the application if the question raised was pending in any proceedings under any provisions of the GST Act. The applicant claimed that as there were no pending proceedings under the provisions of the GST Act hence the application is admissible.

The applicant alleged exemption of services on conducting examination that was related to the admission and not related to the examination based on which degree/title, etc. are conferred to the students.

The application was admitted and the question for which ruling is sought is taken up for decision. The coram comprised of Kurinji Selvaan and B. Senthilvelavan analyzed the matter and ruled that the composite supply of sale of application, registration, inspection, etc. with 'affiliation' of the applicant as the 'Principal supply' are not exempted under the entry Sl.No.66 of Notification No. 12/2017-C.T.(Rate) dated 28 June 2017 as amended.

The coram further ruled that the fees in question collected by the applicant and the supplies thereto results in the activity of affiliation of the institution, up gradation, increase in the capacity/course, etc., and are governed by the UGC regulation. It said, "We agree with the claim of the applicant that the entire gamut of activities for which the fees in questions are collected is a 'composite supply' with extending 'affiliation' to an institution of higher education being the Principal Supply."

The coram clarified that any appeal against the order of AAR shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 days from the date on which the ruling sought to be appealed against is communicated.