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GST on Education Services

Education is defined as “Education is a process of training and developing the knowledge, skill and character of students by normal schooling.”

Taxation of education services is a sensitive issue as it is the basic right of every person to get an education and levying GST on it have a major impact on the society. However, education is also getting commercialized day by day.

Classification of Education Services

Heading & Group Service Code (Tariff) Service Description
Heading no. 9992   Education services
Group 99921 999210 Pre-primary education services
Group 99922   Primary education services
  999220 Primary education services
Group 99923   Secondary Education Services
  999231 Secondary Education Services, General
  999232 Secondary Education Services, Technical and Vocational
Group 99924   Higher Education Services
  999241 Higher Education Services, General
  999242 Higher Education Services, Technical
  999243 Higher Education Services, Vocational
  999249 Other higher education services
Group 99925   Specialised education services
  999259 Specialised education services
Group 99929   Other education & training services and educational support services
  999291 Cultural education services
  999292 Sports and recreation education services
  999293 Commercial training and coaching services
  999294 Other education and training services
  999295 services involving conduct of examination for admission to educational institutions
  999299 Other Educational support services

Rate of GST

The rates of GST on education services (as per Notification No. 11/2017-Central Tax (Rate), Notification No. 11/2017-Central Tax (Rate) and Notification No. 12/2017-Central Tax (Rate) all dated 28.06.2017 as amended) are as below:

Chapter/ Section/ Heading Description of Service Rate / Notification
9992 Education Services 18% ( 9% Central Tax + 9% State Tax)/ Serial No. 30 of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017
9992 Services provided –
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of, –
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;
(iii) security or cleaning or housekeeping services performed in such educational institution;
(iv) A services relating to admission to, or conduct of examination by, such institution; up to higher secondary: Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent
NIL/Serial No. 66 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017
9992 Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme: – (a) two year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management; (b) fellow programme in Management; (c) five year integrated programme in Management. NIL / Serial No. 67 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017
90 or any chapter Technical aids for education, rehabilitation, vocational training and employment of the blind such as Braille typewriters, Braille watches, teaching and learning aids, games and other instruments and vocational aids specifically adapted for use of the blind Braille instruments, paper etc. 5%/ Serial No. 257 of Schedule I of the Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017
9023 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses 28 %/ Serial No. 191 of Schedule IV of the Notification No. 1/2017-Central Tax (Rate) dated 28th June, 2017

 

Thus services provided by an educational institution to students, faculty and staff are exempt. Educational Institution means an institution providing services by way of:

  • Pre-school education and education up to higher secondary school or equivalent.
  • Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force. The service should be delivered as part of the curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to the grant of a recognized qualification.
  • Education as a part of an approved vocational education course.

Services provided by way of education as a part of a prescribed curriculum for obtaining a qualification recognized by a law of a foreign country is not covered above and thus not exempted under GST.

Notification No. 12/2017 – Central Tax (Rate) dated 28th June 2017, defines approved vocational education course as under: An “approved vocational education course” means: –

  • A course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961).
  • A Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship.

Private coaching centres or other unrecognized institutions, though self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions available to an educational institution.

Related Services

Output services of lodging/boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualification recognised by law, are fully exempt from GST.

Input Tax Credit

Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side.

Place of Supply

The place of supply will be the place where such service is provided.

Place of supply of services provided by way of organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or services ancillary to organisation of any of the events or services, or assigning of sponsorship to such events: –

  • To a registered person, shall be the location of such person.
  • To a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.

Educational Institution run by charitable organizations

If trusts are running schools, colleges or any other educational institutions or performing activities related to advancement of educational programmes specifically for abandoned, orphans, homeless children, physically or mentally abused persons, prisoners or persons over age of 65 years residing in a rural area, activities will be considered as charitable and income from such services will be wholly exempt from GST in terms of Notification No. 12/2017 – Central Tax (Rate) dated 28th June 2017.

Also Read – GST on co-operative housing society

About Prateek Agarwal

Prateek Agarwal is a Practicing Chartered Accountant from Jaipur and been in practice for more than 7 years. He writes mainly about GST and Finance.

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