The Indian Institute of Management-Ahmedabad (IIMA) is in no mood to give up on a refund of Rs 2.24 crore in service tax that was denied by the state GST department on the ground of ‘unjust enrichment’. The IIMA has now moved the Gujarat High Court, and a bench of Justice N V Anjaria and Justice D M Desai on Wednesday issued notice to the department and sought its reply by June 7. The IIMA’s counsel, Paritosh Gupta, argued that no tribunal had been set up under the GST laws to hear appeals against the GST appellate authorities’ decision to reject nine different refund claims.
The IIMA conducts a Postgraduate Programme in Management for Executives (PGPX), a one-year full-time course. The IIMA courses were approved by the Centre and exempted from tax collection in 2011. However, the tax was claimed for the IIMs’ courses on the ground that they were not approved by the All-India Council for Technical Education. This dispute was decided in favour of the IIMs by the Kerala High Court.
The IIMA collects money from students in order to pay service tax to the GST department, despite the fact that PGPX is not a programme subject to taxation and that it would seek a refund if the issue of taxability was resolved in the IIMs’ favour. Following the Kerala High Court’s decision, IIMA filed nine applications for GST refunds on tuition collected from PGPX students between July 2017 and November 2018.
The IIMA was issued a show-cause notice proposing to deny refund claims on the basis that the details of tax passed on in respect of GST paid could not be verified. The refund claims were denied by the institute due to unjust enrichment.
In this case, the IIMA lost its appeal before the state tax commissioner (appeals), and no reason was given. The institute petitioned the HC for a directive to the state GST administration to reimburse the GST paid, claiming that the rejection orders had a direct impact on the students.
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