Service Tax cannot be levied on affiliation fees and rent collected by universities

Last updated: 25 August 2022
Quick Summary
The Karnataka High Court has ruled that universities are not liable to pay service tax on affiliation fees and rent collected from incidental activities. The court determined that affiliation fees are intrinsically linked to the provision of educational services, which are exempt from service tax. Furthermore, rental income from buildings used for canteen and banking purposes was also deemed exempt as an activity naturally bundled with the core educational service.

Court :
Karnataka High Court

Brief :
The Hon’ble High Court, Karnataka in the matter ofM/s Rajiv Gandhi University of Health Science v. Principal Additional Director General and Ors. [Writ Petition No.57941 of 2018 dated July 26, 2022] held that Service Tax cannot be levied on affiliation fee and fees collected for other incidental activities by the universities for providing educational services.

Citation :
Writ Petition No.57941 of 2018 dated July 26, 2022

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