India, May 3 -- In a major relief to the University of Mumbai, the Bombay High Court has struck down a Rs.33.80 crore Goods and Service Tax (GST) demand on affiliation fees, calling the move "gross absurdity" and ruling that a university's statutory functions cannot be treated as "business.". The court quashed the tax orders which were issued in January 2025, including penalties.

A division bench of Justices GS Kulkarni and Aarti Sathe set aside the orders of the Additional Commissioner of Central Tax, which had imposed Rs.16.90 crore GST along with an equal penalty.

The court said universities operate under the Maharashtra Public Universities Act, 2016 meant to regulate and strengthen higher education, and not to carry out commercial a...