Background

Following an anti-evasion inspection, a consolidated SCN for July 2017–November 2023 demanded GST of about Rs. 20.90 crore on affiliation, registration, documentation, licence and late fees, invoking Section 74 for July 2017–August 2018. The first appellate authority dropped documentation charges, late entry fees and licence fees, and regularised affiliation fees up to 17.06.2021 under Circular 234/28/2024-GST. It upheld tax on affiliation fees after 18.06.2021 and on annual and late registration charges for the whole period, with Section 74 and penalties. Eight issues were framed in CISCE’s appeal.

Final Verdict

The Tribunal held that a consolidated SCN covering several years is not invalid without demonstrable prejudice. Applying Dilip Kumar & Co. (strict construction of exemptions) and distinguishing High Court rulings on statutory universities, since CISCE is a registered society, it held that affiliation, including processing and form charges, is an independent taxable supply and not a service “relating to admission to, or conduct of examination” under Entry 66(b)(iv). Annual and late registration charges were likewise held taxable and outside the regularisation in Circular 234/28/2024-GST, whose challenge was rejected.

In CISCE’s favour, it held that since no tax was separately collected, the amounts received must be treated as cum-tax under Rule 35, and that, the respondent having called for and received details in 2023, fraud, wilful misstatement or suppression was not established. The demand for July 2017–August 2018 (Rs. 1,29,60,720) was therefore set aside as time-barred, together with its interest and penalty. Demands for September 2018–November 2023 were upheld with Section 73 penalty and the Section 125 penalty of Rs. 25,000, no penalty or interest was to apply to the regularised affiliation period, and the liability was ordered to be recomputed. The outcome is neutral: the levy was upheld, but with substantial relief.