Nursing colleges’ inspection fees not exempt from GST

The Telangana high court has made it clear that fee paid by nursing colleges to Kaloji Narayana Rao Health University for getting their colleges inspected and affiliated are taxable under GST law and they do not come under the exempt category of services.

A bench of Justice P Sam Koshy and Justice Laxmi Narayana Alishetty said this in its judgment after hearing a batch of petitions filed by Care College of Nursing and nine other colleges wherein it held that

the exempt services were those rendered by these colleges to the students, the faculty and staff. Under the exempt category, services like conduct of entrance examination, etc., where there would be no GST on fee collected from the students.

The tax authorities were collecting GST from the health university for fees it collects from nursing colleges during inspections and the consequent affiliations. The university, in turn, has been asking these colleges to pay for these services.

The nursing colleges challenged the imposition of GST on them.Agreeing with Dominic Fernandes, counsel for the tax wing, who contended that these colleges cannot claim to be doing any education service at time of setting up colleges, the bench said:

“It is at the inception stage that inspection is conducted and the affiliation is thereafter granted.

The admission and services rendered to students, and staff are services rendered subsequent to affiliation. The contention that petitioners are rendering education services is hard to accept.