In Advance Ruling No. KER/17/2023 -AAR- AAR (Kerala) rules services provided by University of Calicut to affiliated colleges exempted from GST
Members Dr. S. L. Sreeparvathy & Abdul Latheef. K. [25-05-2023]

Read Order: In Re: M/s. University of Calicut

Chahat Varma

New Delhi, July 24, 2023: The Kerala bench of the Authority for Advance Rulings has ruled that the services provided by M/s. University of Calicut (applicant) to its affiliated colleges fell within the definition of 'supply' as per Section 7 of the Central Goods and Services Tax Act (CGST Act). It was further determined that these services were exempted from GST payment under entries 4 and 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.

Briefly stated, the applicant had sought an advance ruling to determine whether the services provided by the University of Calicut to its affiliated colleges and students would be considered as 'Supply' and therefore subject to GST. If the answer was affirmative, the applicant also inquired whether the supply of services by the University would be exempted under Entries 4 and 5 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and SRO 371/2017 dated 30.07.2017.

The two-member bench of Dr. S.L. Sreeparvathy and Abdul Latheef. K. observed that the definition of 'business' under the CGST Act was inclusive and covered functions undertaken by the Central Government, State Government, or Local Authority as a public authority. Consequently, the services provided by the applicant to its affiliated colleges were considered to fall within the definition of 'business' under the CGST Act. As a result, these services were deemed to constitute a supply within the meaning and scope of 'supply' as defined in Section 7 of the CGST Act.

The bench also noted that entry Nos. 17, 18, and 19 of the Eleventh Schedule of the Constitution covered all types of education, and education was also covered under entry No. 13 of the Twelfth Schedule of the Constitution. Therefore, education was a function entrusted to both Panchayats and Municipalities under Article 243G and 243W, respectively, of the Constitution. The University of Calicut, being a public university established under the Calicut University Act, 1975, which was passed by the Legislature of the State of Kerala, fell under the definition of ‘Governmental authority’. As a result, the services provided by the applicant to its affiliated colleges were considered services by a ‘Governmental authority’ in relation to the functions entrusted to a Panchayat and Municipality under Article 243G and 243W of the Constitution. Accordingly, it was ruled that these services were exempted from the payment of GST as per entries at Sl. Nos. 4 and 5 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017.