2 Punjab universities fail to pay Rs 5.31 cr of GST: CAG report

Chandigarh, Sep 4 (PTI) The Punjabi University, Patiala, and the Sardar Beant Singh State University, Gurdaspur, in Punjab failed to pay the Goods and Services Tax (GST) worth Rs 5.31 crore against taxable services, according to a CAG report.

The report of the Comptroller and Auditor General of India for the year ending March 2022 was tabled in the Punjab Assembly on Wednesday which was the concluding day of the three-day session.

The report said the services provided to educational institutions by way of security or cleaning or house-keeping were not exempt from the GST, where educational institutions were providing services other than pre-school education and education up to higher secondary school or equivalent.

Audit scrutiny of records between November 2021 and August 2022 of the two educational institutions revealed that these institutions had received security services and employment and labour services valuing Rs 30.55 crore from six service providers during the period from July 1, 2017 to March 31, 2022.

According to the CAG report, only one educational institution paid GST of Rs 19 lakh under forward charge mechanism to one service provider.

The remaining GST of Rs 5.31 was not paid, it said.

In its reply in February 2022, the Punjabi University said the service provider concerned never charged GST. The Sardar Beant Singh State University in its reply in August 2022 that only one service provider charged GST and the same was paid by the institution.

"Replies of the educational institutions were not acceptable because these educational institutions were expected to be aware of their liabilities under the GST law while receiving taxable services, whether those services were taxable under reverse charge mechanism or forward charge mechanism because the financial burden of GST, being an indirect tax, was ultimately to be borne by these educational institutions," said the CAG.

Therefore, the educational institutions were supposed to pay applicable tax under reverse charge mechanism for security services and take corrective measures for other services, where tax was payable under forward mechanism but the same was not charged by the service providers in their invoices, it said. PTI CHS AS AS