Rukmani Devi Memorial College Of Agriculture vs. Union Of INDIA

Held

The Court held that the grant of affiliation by a University is a statutory and regulatory function and does not constitute a supply of service under the CGST Act, as it is not carried out in the course or furtherance of business and does not equate to trade or commerce. Affiliation fees were held not to be consideration for any taxable activity because there is no element of choice, bargaining, or reciprocity, and the fee is a statutory levy without quid pro quo. Furthermore, even if considered a service, affiliation is inseparably connected with educational delivery and falls within the ambit of exempt services under Entry 66(a) and Entry 66(b)(iv) of Notification No. 12/2017-CT (Rate), similar to services provided by Central and State Educational Boards. The levy and collection of GST on affiliation fees were deemed illegal, unsustainable, and without authority of law. The proposed levy and demand of GST on affiliation fee were held unsustainable. The court directed that any amount of GST on affiliation fee already paid by the petitioner shall be refunded within four months, provided the burden has not been passed on to students, with interest at 7% per annum if not refunded.

Facts

The petitioner, Rukmani Devi Memorial College of Agriculture, is challenging impugned orders dated 03.09.2025 and 16.09.2025 passed by Respondent No.5. The petitioner contends that the levy and demand of Goods and Services Tax (GST) on affiliation fees is legally unsustainable, arguing that affiliation does not constitute a taxable service. The parties have agreed that the controversy has been settled by a previous judgment of the same court dated 23.02.2026 in Rajasthan Technical University v. Union of India. The petitioner is represented by Mr. Indresh Sharma, Ms. Shalini Yadav, and Mr. Yuvraj Singh Rathore, while the respondents are represented by Mr. Bharat Vyas, ASG, Mr. Vedant Agarwal, Mr. Rakesh Choudhary, and Ms. Mahi Yadav, AAG.

Key Issues

1. Whether the grant of affiliation by a University constitutes a "supply of service" under Section 7 of the CGST Act? The petitioner argues that affiliation is a statutory function and not a commercial activity. The revenue's stance is not explicitly recorded on this point, but the court's prior judgment addressed it. 2. Whether affiliation fees constitute "consideration" for a taxable supply? The petitioner contends that affiliation is compulsory, lacking choice or bargaining, and the fee is a statutory levy, not a payment for a negotiated service. The revenue's position is not separately detailed here. 3. Whether services related to affiliation are exempt under Entry 66 of Notification No. 12/2017-CT (Rate)? The petitioner asserts that affiliation is intrinsically linked to educational delivery and should be covered by the exemption. The revenue's argument on this is not specified. 4. Whether the levy of GST on affiliation fees is valid? The petitioner argues that such a levy is impermissible and without legal authority. The revenue's arguments are not detailed in this excerpt.