GST Battle ends: Doctors to get refund of GST paid with DNB course fees, NBE issues notice

Diplomate of National Board (DNB) is a Post-graduate Master's degree same as MD/MS degree which is awarded to Specialist Doctors in India after they complete tenure of three years. The degree holds a similar value like that of Doctorate of Medicine (DM) and Master of Chirurgiae (MCh) awarded in medical and surgical super specialties.

Earlier, the Central Board of Indirect Taxes and Customs (CBIC) had previously clarified that fee paid to the various education boards including the National Board of Examinations (NBE) would not be subject to goods and services tax (GST) anymore.

This no GST policy, however, would be applicable only for the purpose of conducting entrance examination or admission process. CBIC has clarified that 18% GST would be applicable for services provided by these boards such as granting accreditation to an institution or to a professional.

Following such clarifications from CBIC, the Association of DNB Doctors along with the Federation of Resident Doctors Association (FORDA) had written to the NBE regarding the matter and they questioned the inclusion of GST charges in the annual course fees of DNB candidates.

NBE had allegedly directed the candidates to deposit the annual course fee of Rs 1,47,500 (including 18% GST) to the NBEMS account within 05.08.2021 and warned that failing to submit the fees within the deadline might lead to the cancellation of the candidature of the NBEMS trainee.

Later, the Association of DNB Doctors took the matter before the Apex Court. However, observing that the petitioner association, the Association of DNB Doctors is based in Delhi and the National Board of Examinations (NBE) against whom the relief is sought is also situated in Delhi, the Supreme Court bench had dismissed the plea and asked the association to file the case before the Delhi High Court.

The Delhi High Court bench earlier held that the GST collected from the candidates pursuing Diplomate National Board (DNB) against the course fee paid by them has to be refunded.

With this observation, the Delhi High Court division bench of Justice Vibhu Bakhru and Justice Amit Mahajan had asked the National Board of Examinations (NBE) to file an affidavit and disclose the names of all the candidates from whom the course fee and the GST had been collected.

Further, NBE directed to submit the details including the quantum of course fee and GST separately, the name of the hospital to which the course fee was remitted in respect of each candidate, and also the mode and date of remitting the funds to the hospital. NBE had been directed to file the affidavit within six weeks.

Complying with the directions issued by the HC bench, NBE filed an affidavit dated 25.10.2023 disclosing the number of candidates from whom the course fee and the GST were collected, as well as the number of transactions in which the same was collected.

The HC bench noted that a part of the GST collected by the NBE was still available with the NBE. However, the bulk of GST collected has been remitted to the hospitals along with the course fee.

Taking note of this, the bench agreed with the petitioners' contention and set aside the impugned notifications. On instructions, the counsel for NBE informed that the impugned notifications to the extent that they seek to collect GST on course fee, shall be withdrawn by issuance of a public notice.

"In view of the above, no further orders are required to be passed in this regard except to restrain NBE from collecting any further GST pursuant to the said notification," noted the bench.

Based on these observations, the HC issued the order ordering refund of the GST amount collected on course fee to the NBEMS trainees.