GST on Recruitment Fees: Kerala Devaswom Recruitment Board Ruling
The Authority for Advance Ruling decided that recruitment boards must pay GST on application fees if their turnover exceeds the registration threshold.
- Ruling
- ADVANCE RULING No. KER/29/2025 Dated: 08.10.2025
- Dated
- 08 Oct 2025
- Authority
- Authority for Advance Ruling
This page was written by Patron Accounting’s AI from the official release and reviewed before publishing. It explains the document in plain language. It is not the document itself. Where this page and the original differ, the original governs.
The short version
- Recruitment boards are considered taxable service providers under GST law.
- Application fees collected from candidates are taxable supplies.
- Statutory status does not automatically grant an exemption from GST registration.
In short
The Kerala Devaswom Recruitment Board asked if they needed to register for Goods and Services Tax (GST) and pay tax on the fees they collect from job applicants. The authority decided that because the board provides a service for a fee, it is running a business in the eyes of the law. This means the board must register for GST if its total income crosses the standard limit.
What has changed
How it worked before
Many statutory bodies assumed that because they were created by the government to perform public duties, they were automatically exempt from GST on all their activities.
What has changed
The authority ruled that recruitment services are taxable supplies. If a board's annual turnover exceeds the registration threshold, it must register, collect GST from candidates, and pay it to the government.
Who this affects
Statutory recruitment boards, public service commissions, and similar government-appointed bodies that charge fees for conducting examinations.
An example
Imagine a state-run recruitment agency that charges candidates a fee to apply for government jobs. They previously assumed they were exempt because they are a government body. Based on this ruling, they must now calculate their total annual fee collection. If that amount exceeds the GST registration threshold, they must register and start charging GST on those application fees.
What you should do
If you run a similar board, check your annual turnover against the GST registration limits. Remember that an Advance Ruling only binds the specific business that asked for it; it is not a law that applies to everyone automatically. You should consult with a tax professional to see if your specific activities qualify for any other exemptions.
If you do nothing
If you assume this ruling does not apply to you and fail to register when required, you may face penalties for non-compliance. Tax officers may issue notices for unpaid tax, interest, and late fees. Relying on a ruling that does not apply to your specific situation can lead to costly legal disputes.
The terms explained
- Taxable supply
- Any sale, transfer, or service provided for a fee that is subject to GST.
- Aggregate turnover
- The total value of all taxable supplies and exempt supplies made by a business during a financial year.
- Statutory body
- An organization created by a specific law passed by the government to perform certain public functions.
The ruling in detail
Authority for Advance Ruling
Kerala Devaswom Recruitment Board
ADVANCE RULING No. KER/29/2025 Dated: 08.10.2025 · Keralam
Questions before the authority
- Whether GST Registration is to be obtained by the Board?
- Whether GST is to be collected from the application fee collected from the candidates?
- Whether GST is applicable for the activity of conducting examination?
Facts
The applicant is a statutory body constituted by the Kerala Devaswom Recruitment Board Act, 2015, tasked with conducting examinations to select candidates for various posts in Devaswom Boards. It collects application fees from candidates to cover recruitment-related expenses, including advertisements, printing, and remuneration for examiners. The applicant sought a ruling on whether these activities constitute a taxable supply and if they are required to register under the GST Act.
Ruling
| Question | What the authority ruled |
|---|---|
| GST Registration | Liable to be registered if aggregate turnover exceeds the threshold limit Subject to Section 22 or 24 of the CGST Act |
| GST on application fee | Yes, chargeable to GST Considered consideration for services supplied |
| GST on conducting examination | Yes, constitutes a taxable supply Not exempt under the cited notifications |
The Authority ruled that the applicant is a taxable service provider and is liable to register if its aggregate turnover exceeds the prescribed threshold. It further held that the examination fees collected from candidates constitute consideration for services provided, making the activity a taxable supply under the GST Act. Consequently, the applicant is required to collect and pay GST on these fees.
Reasoning
The Authority determined that the applicant's recruitment activities fall within the definition of **business** under Section 2(17) of the CGST Act, as they involve a reciprocal supply of services for consideration. It concluded that the applicant does not qualify for the exemption provided to governmental authorities under Notification No. 12/2017-Central Tax (Rate) because its functions do not align with those entrusted to a Panchayat or Municipality under Articles 243G or 243W of the Constitution. Therefore, the services are taxable, and the applicant must comply with registration requirements under Section 22 if the turnover threshold is met.
Provisions relied on
- Section 2(17) of the CGST Act, 2017
- Section 7 of the CGST Act, 2017
- Section 9 of the CGST Act, 2017
- Section 22 of the CGST Act, 2017
- Section 24 of the CGST Act, 2017
- Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017
For the practitioner
This ruling clarifies that statutory recruitment boards are **not automatically exempt** from GST merely by virtue of their status as governmental authorities. Practitioners should note that recruitment services provided for a fee are treated as taxable supplies, and boards must monitor their aggregate turnover to determine registration liability. It does not provide a blanket exemption for all public sector recruitment activities.
Source
This is a summary prepared from the published order, which is a scanned document. It is a reading aid and not the authority: where the two differ, the order governs. Verify every provision against the original before relying on it.
Original order: https://www.gstcouncil.gov.in/sites/default/files/AAR/1-kerala_deveswom_recruitment_board.pdf
Legibility of the scan, as read: high.
Prepared 15-10-2026.
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