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Challenge To 18% GST On DNB Doctors' Fee : Supreme Court Asks Petitioner To Approach Delhi HC

Mehal Jain
3 Sep 2021 3:07 PM GMT
Challenge To 18% GST On DNB Doctors Fee : Supreme Court Asks Petitioner To Approach Delhi HC
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It was highlighted before the Court that the petitioner is a Delhi-based association.

The Supreme Court on Friday directed the Association of DNB Doctors to move the Delhi High Court against the imposition of 18% GST on fee deposited by DNB Candidates.Diplomate of National Board (DNB) is a Postgraduate Master's degree same as MD/MS degree awarded to the Specialist Doctors in India after completion of a three-year residency. DNB courses are run and the degrees are awarded by...

The Supreme Court on Friday directed the Association of DNB Doctors to move the Delhi High Court against the imposition of 18% GST on fee deposited by DNB Candidates.

Diplomate of National Board (DNB) is a Postgraduate Master's degree same as MD/MS degree awarded to the Specialist Doctors in India after completion of a three-year residency. DNB courses are run and the degrees are awarded by the National Board of Examinations (NBE), New Delhi, under the Ministry of Health and Family Welfare, Government of India to the candidates on successful completion of their postgraduate residency.

When the matter came up before the bench of Justices D. Y. Chandrachud, Vikram Nath and Hima Kohli on Friday, Senior Advocate Maninder Singh, for the respondent-authority, urged that when the matter could have been resolved before the High Court under Article 226, it was not necessary for the top court to have taken cognisance by issuing notice on the Article 32 petition.

"The reason for that is that this issue would have pan-India ramifications. Otherwise, we would have petitions in many High Courts on this issue", explained Justice Chandrachud.

However, when Mr Singh pointed out that the DNB is an association of doctors based in Delhi, the bench asked the petitioner to move to the High Court.

When Senior Advocate A. N. S. Nadkarni, for the petitioner, sought to press the urgency of the matter, Justice Chandrachud asked him to move the Delhi High Court for interim relief immediately.

Justice Kohli, whose parent High Court happens to be the Delhi High Court, added, "If you were to file by 12 'o' clock, it could even be listed the following day."

With that, the bench disposed of the petition, with liberty to the petitioner association to move the Delhi High Court.

The Division Bench of Justices Chandrachud and M. R. Shah had on August 23 issued notices on the petition while making note of the following submissions made by Senior Advocate A. N. S. Nadkarni:

  • GST at 18% is being charged on course fee payable by candidates for DNB Course conducted under National Board of Examination.
  • The fee of 1.25 lakhs which was enhanced on 3 April 2019 is by virtue of clarification dated 15th Feb 2021 being applied to all ongoing broad specialities, super speciality and fellowship courses irrespective of year of joining.
  • As regards GST, the Government's notification issued by Ministry of Finance and Department of Revenue dated 7th June 2021 indicate that there is an exemption for payment of payment GST.

During the hearing, Mr Nadkarni submitted that even when the Board's notification itself states that the fee cannot be increased by more than 5%, the fee has been increased from 80,000 to 1 lakh.

Regarding their prayer for directions to National Medical Commission to conduct Practical Theory Exams of 2 consecutive sessions, December 2020 & June, 2021, with gap of minimum one month, Mr Nadkarni submitted that he would argue that aspect later.

"That we may not get into. The schedule is already out and Exams are already going on for DNB." the Bench said.

Mr Nadkarni however submitted that he may seek a general observation later stating that these examinations cannot be combined. He added that the idea of having the exams in different months is that so people can appear in both, and the exams cannot be held one after the other and disentitle people from appearing.

Mr Nadkarni informed the Court that the Board has itself fixed the fee upto 80,000 which colleges are entitled to charge.

"Amount of 80,000 was fixed in 2018 and it will apply to even students passing in 2021. That is their own regulation. The fee is increased to 1.25 lakh in 2019, so 2019-22 this will apply. Now what is sought to be done through the impugned notification GST is sought to be added. It says payment of GST is mandatory according to Government which is not true, it is the contrary." Mr Nadkarni said.

The Bench opined that this fee of 1.20 lakh is not just for the exam, and is charged by the National Board of Examination for the entire course and may not be exempt.

"What they are charging for exams may not be subject to GST, but the course fee is subject to the 18% GST", the Bench said.

"The idea is that educational institution shouldn't be charged. It's not a service. It is something that the State provides", Mr Nadkarni said.

"The Respondent conducts DNB exams for broad speciality, super speciality courses. I'm doubtful if this notification will apply to these institutions charging fees for courses", Justice Chandrachud said.

" It is an important issue, anyway we should consider it", Justice Chandrachud said.

"They have not increased the fee, it is due to GST that it has come to more than 1 lakh", Justice Shah said

Justice Shah further asked Mr Nadkarni, "How can you challenge levy of 2019 now?"

Mr Nadkarni responded by saying that in 2019, it was clarified that it (increase in fee) will only apply to students from that year. However, now, when they are imposing GST on the fee, they have clarified that it will apply to everyone including 2018 students.

The petitioner Association was represented by Senior Advocate ANS Nadkarni, Advocates Puneet Yadav, Sourabh Gupta and Parijat Kishore.

In this case, the DNB Doctors had sought the quashing of notification imposing 18% GST on DNB Candidates on the following grounds:

  • The fee of DNB & FNB Candidates are fixed on basis of several factors prevailing in each State including operating costs, salary, etc and stipends paid to them depending on scales fixed by different States.
  • A maximum permissible limit for charging the fees has been notified by NBE to ensure that unnecessary financial difficulties are not caused to DNB candidates.
  • The introduction of 18% GST on fee being directed to be deposited by the DNB/ DrNV and FNB candidates is totally unreasonable and unfounded. These courses are 2-3 year professional courses recognised by National Medical Commission as recognised postgraduate medical qualifications registrable for practising medicine in India. They, therefore, fall in category a of Central Tax notification dated 28th June 2016 and are exempted from GST.
  • Even after a clarification of the dated 17th June 2021, the National Board of Examinations is forcing its students to pay extra GST charges on Education/ Tuition fees by way of threatening emails saying that if the fee is not paid till August 5th, their candidature will be cancelled.

Case Title. Association of Diplomate of National Board Doctors v. National Medical Commission

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