The Bombay High Court, by its judgment pronounced on 27th April, 2026 in University of Bombay vs Union of India held that the collection of affiliation fees by the University does not attract the levy of GST since the activities of the University relating to the affiliation do not constitute ‘supply’ in terms of Section 7(1)(a) of the CGST Act, 2017.
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A gist of certain key observations of the Court is given below:
- Chapter X of the Maharashtra Public Universities Act, 2016, inter alia, dealing with affiliation is a code by itself, for which the University certainly is required to undertake various activities like verification of the necessary infrastructure for starting a college, creation of other necessary educational facilities, etc., and incur expenditure for the same. These activities, however, are within the statutory framework and not for any profit or for any service being provided under any business, as the law would envisage. Such activities of the University are required to be read in the context of the definition of ‘affiliated college’, ‘college’, and other related expressions. These activities do not admit of any commercial concept and cannot be regarded as business activities. [ Para 20]
- On the issue whether such activities would fall within the purview of S. 7 of the Act to attract the applicability of S. 9 of the Act, the Court rejected the respondent’s contention of simplicitor selecting the words “furtherance of business” to submit that the business would be required to be understood in the context of S. 2(17)(a). The words ‘furtherance of business’ are required to be read, not in isolation but in the context of the preceding contents of clause (a). None of the contents of clause (a) of S. 7(1) would imply, the inclusion of statutory activities of granting of affiliation and collection of affiliation fees. Even the reliance on the definition of ‘business’ under S. 2(17)(a) is also misplaced, since the activities specified therein need to be read ejusdem generis where such activity is for a pecuniary benefit and activities incidental thereto. [ Para 21]
- Once such activity itself is not ‘supply’ and/or it is not ‘business’, the charging provision of S.9 can not come into play. Consequently, the proper officer would not have jurisdiction to issue a show cause notice under S. 74 of the Act.[Para 24]
- The Court agreed with the view taken by the same Court in Goa University’s case, by Karnataka HC in Rajiv Gandhi University’s case and the Rajasthan HC in Rajasthan Technical University’s case. [ Para 30]
- Even assuming that the collection of affiliation fees attracted the levy of GST, it was covered by the notification no.12/2017-CT ( Rate) [ entry 66].[ Para 31]
Shri V. Raghuraman, Sr. Advocate represented the Petitioner.
A copy of the judgment is attached.
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