Refund GST Amount to DNB Candidates as Expeditiously as Possible: HC Directs NBE, Hospitals

New Delhi: The Delhi High Court recently directed the National Board of Examinations (NBE) to ensure that appropriate steps are being taken to refund the GST amount available with them to the Diplomate of National Board candidates from whom the GST amount was collected, as expeditiously as possible.

Further, the HC bench comprising Justices Vibhu Bakhru and Amit Mahajan directed that in cases where the GST amount has been transferred to the hospitals and has not been deposited with the GST authorities, the concerned hospitals shall refrain from doing so and take necessary steps to immediately refund the amount the candidates.

"In cases where the GST has been deposited with the concerned GST authorities, the concerned hospitals shall take steps to apply for the refund of the said GST," further directed the bench.

These directions were issued by the HC bench while considering a plea by the Association of Diplomate of National Board (DNB) Doctors. The association filed the plea challenging the notification issued by NBE, whereby Goods and Services Tax (GST) at the rate of 18% was collected from the DNB candidates along with the course fees.

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.

Medical Dialogues had earlier reported that 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.

Also Read: DNB doctors to get refund of GST paid with course fees: Delhi HC order

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.

Meanwhile, the counsel for the parties also suggested to the court to issue further directions and the petitioners sought that the directions are implemented within the strict timelines. However, the respondent authorities expressed their reservations in this regard.

Taking note of the suggestions, the bench issued the following directions:

"i. In cases where the GST amount is available with the NBE, the NBE shall take steps to refund the same to the candidates from whom the said GST was collected, as expeditiously as possible.

ii. In cases where the GST amount has been transferred to the hospitals and same has not been deposited with the GST authorities, the concerned hospitals shall refrain from doing so and take steps to immediately refund the amount to the candidates from whom the GST was collected.

iii. In cases where the GST has been deposited with the concerned GST authorities, the concerned hospitals shall take steps to apply for the refund of the said GST."

The bench noted that the affidavit filed by NBE indicated that there are two or three transactions that have not been traced to the candidates. "The NBE shall make all efforts to trace the said transactions to the concerned candidates and upon identifying the candidates, take steps to ensure that the GST collected is refunded to them. In the event, the GST is available with the NBE, it will be refunded to them immediately. In cases where the GST has been transferred to hospitals, the same would abide by the directions as issued above," ordered the bench.

"We request the concerned GST authorities to process such applications as expeditiously as possible. The concerned hospitals, on receipt of the fund from the GST authorities, shall take immediate steps to refund the same to the candidates from whom the GST was collected," it further mentioned.

"The NBE shall communicate this order to all the concerned hospitals and ensure that the same is received by them. We also consider it apposite to take all necessary follow-up action for implementation of these orders with liberty to apply, if necessary," further mentioned the order.

To view the order, click on the link below:

https://medicaldialogues.in/pdf_upload/delhi-hc-gst-224858.pdf

Also Read: 18 percent GST on DNB course fee: Doctors told to move Delhi HC