Jawaharlal Nehru Technological University Kakinada vs THE PRINCIAPL COMMISSIONER OF CENTRAL TAX & Ors

GST update /2026-27/0012

Petition No. & Citation: W.P.No.23535 of 2023

Hon’ble Judge(s)	R Raghunandan Rao
Date of Order	27.04.2026
Outcome	Writ Petition allowed in favor of Petitioner

Brief Facts of the Case

The present writ petition was instituted by Jawaharlal Nehru Technological University Kakinada (JNTUK), a statutory University established under the Jawaharlal Nehru Technological Universities Act, 2008 enacted by the State Legislature of Andhra Pradesh. The University were subjected to GST assessment proceedings whereby the Department sought to levy GST on Affiliation Fees collected from affiliated colleges and No Objection Certificate (NOC) Fees collected for grant of statutory permissions. The authorities initiated assessment proceedings against the petitioner on the premise that the affiliation fees and NOC fees so collected constituted consideration received against supply of taxable services. Consequently, Order-in-Original was passed confirming GST demand of Rs.2,64,87,723/- along with applicable interest and penalties under the CGST Act.
Aggrieved, the petitioner approached the Hon’ble Andhra Pradesh High Court challenging the very taxability of such statutory receipts on the ground that the same were collected in discharge of mandatory statutory functions and did not amount to consideration for any taxable supply in the course or furtherance of business.

Relevant Section / Rule / Notification

Entry No.66 of GST exemption notification No.12 of 2017, dated 28.06.2017
Section 7 of the GST Act
Section 2 (17) of the GST Act
Entry 4 and Entry 5 of notification number 12 of 2017

Question before Hon’ble Court

Whether affiliation fees and No Objection Certificate fees collected by JNTUK from affiliated colleges constitute consideration for “supply of services” under Section 7 of the CGST Act?
Whether such activities are entitled to exemption under Entry No.66 of GST exemption notification No.12 of 2017 or Entry 4 and Entry 5 of notification number 12 of 2017?

Brief Arguments by Petitioner

(i) Activities are statutory, compulsory and regulatory in nature
It was argued that the University is not a private service provider, but a statutory University created by legislation to regulate technical education. Grant of affiliation, continuation of affiliation, inspection of institutions, scrutiny of compliance parameters and issuance of No Objection Certificates are not optional or contractual services rendered at the will of the University; rather these are legal obligations mandatorily cast upon it under the University Act and UGC framework. Therefore, the fees collected are statutory fees and not commercial consideration.
(ii) Absence of business element
The petitioner submitted that Section 7 of the CGST Act contemplates supply made in the course or furtherance of business. Since the University while granting affiliation/NOC is neither carrying on trade nor commerce nor profession nor any commercial venture, the main element of “business” is absent. Consequently, the impugned activity cannot be brought within the scope of taxable supply.
(iii) Petitioner is a statutory public educational institution and not a commercial taxable entity
The University was established solely for advancement and supervision of education. There is no profit motive, no marketable service and no commercial reciprocity.Hence, taxation based purely on fee collection is legally misconceived.
(iv) exemption under Notification No.12/2017
Alternatively, even assuming taxability, the activities would be covered by exemption entries relating to educational institutions under Entry No.66 of GST exemption notification No.12 of 2017, dated 28.06.2017 or alternatively under governmental authorities under Entry 4 and Entry 5 of notification number 12 of 2017

Brief Arguments by Respondent

The Revenue defended the impugned demand by contending that affiliation granted by the petitioner University and issuance of No Objection Certificates are services rendered to affiliated colleges for a prescribed consideration in the form of affiliation fee and NOC fee. Since such activities are performed against payment and involve grant of approval to the colleges, the same squarely fall within the ambit of supply of services liable to GST.
It was further submitted that the definition of “business” under Section 2(17) of the CGST Act is of wide import and all recurring activities undertaken for consideration are liable to tax unless specifically excluded under Schedule III or exempted by notification. According to the Department, as grant of affiliation and issuance of NOC are not covered by any specific exclusion, the petitioner was rightly subjected to GST along with consequential interest and penalty.

Findings and Judgement

(i) Statutory fees collected by the University cannot be mechanically treated as taxable consideration
The Court examined the basic scheme of Sections 7 and 9 of the CGST Act and observed that GST is not attracted merely because an amount is collected by an entity while performing an act. For levy to arise, the receipt must fall within the definition of taxable “supply” within the meaning of Section 7. Thus, mere collection of affiliation fee or No Objection Certificate fee by itself was held to be insufficient to automatically characterize the transaction as a taxable supply of service. The true legal nature of the underlying activity was required to be examined.
(ii) Grant of affiliation and issuance of NOC are statutory regulatory functions and not business activities
Upon examining the role of Petitioner University, the Court found that the petitioner University is mandatorily required to scrutinize applications of colleges, conduct inspections, verify infrastructural and academic compliance, and thereafter grant or refuse affiliation and issue necessary No Objection Certificates. Such acts are not performed as voluntary commercial services but are discharged in compliance with legal duties cast upon the University as a statutory requirement. The Court therefore held that these activities do not possess the character of trade, commerce or business as contemplated under Section 2(17) of the CGST Act.
(iii) In absence of business nexus, the essential ingredient of “supply” under Section 7 fails
Having concluded that the impugned activities are purely statutory and non-commercial, the Hon’ble Court held that the same are not undertaken in the course or furtherance of business. Since business nexus is a foundational ingredient for invoking Section 7(1)(a), the activities of granting affiliation and issuing NOC do not qualify as taxable supply of service at all.
(iv) Question of exemption becomes immaterial once levy itself is found unsustainable
The Court further observed that the debate regarding availability of exemption notifications would arise only if the activity is first held to be taxable under the charging provisions. Since the Court had already concluded that the very transaction does not amount to taxable supply, examination of exemption entries was rendered academic and unnecessary.
Accordingly, the impugned Order-in-Original confirming GST demand along with interest and penalty was accordingly set aside and the writ petition was allowed in favour of the petitioner University

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GST update /2026-27/0012

Brief Facts of the Case

Relevant Section / Rule / Notification

Question before Hon’ble Court

Brief Arguments by Petitioner

Brief Arguments by Respondent

Findings and Judgement

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