The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, has allowed an appeal filed by Rajeev Gandhi Proudyogiki Vishwavidyalaya (RGPV), Bhopal, and set aside a service tax demand of ₹6,07,01,622 along with interest and penalties. The case arose from an order passed by the Principal Commissioner, Central Tax and Excise, Bhopal, confirming the tax liability for fees collected by the university for granting affiliations, inspection, no-objection certificates, and campus rentals.
The Tribunal held that the affiliation and related activities conducted by a statutory university are not liable to service tax, relying on a series of judgments, including that of the Karnataka High Court in Principal Additional Director General vs. Rajiv Gandhi University of Health Sciences (SLP (Civil) Diary No.59470 of 2024 dated 24.01.2025), which was upheld by the Supreme Court. The Court emphasized that such affiliation activities, being statutory and non-commercial in nature, do not constitute “services” as defined under Section 65B(44) of the Finance Act, 1994.
As for rental income from leasing university premises to entities like banks and post offices, the Tribunal held that RGPV was entitled to threshold exemption, as the income from affiliation was not taxable, rendering the overall taxable receipts below the assessable limit.
Accordingly, the Tribunal set aside the original order dated 19.12.2018, thereby quashing the entire tax demand and associated penalties.
Advocates appearing in the case:
Shri Sandeep Mukherjee, Chartered Accountant for the appellant.
Shri S.K.Meena, Authorised Representative for the respondent.
Read Order
