Entry 13 in the notification exempts ‘educational institution’ from tax on services provided ‘to student, faculty or staff’. As such any income flowing to the institution must bear a direct nexus to the relationship of ‘student, faculty or staff’ whatever may be the service that is provided. But, if the income is indicated to be otherwise than under this relationship, even though between same persons, exemption will abate. For example, payment towards building fund by a student admittedly is not in pursuance of that relationship because it is not towards tuition or any associated service.
(ICAI FAQ PUBLICATION 06-09-2017 : Exemptions on Supply of Services – FAQ NO. 34)