Education is process of training and developing knowledge, skill and character of students by normal schooling. Education is not specifically defined under GST. “Education as part of curriculum for obtaining qualification recognised by law is not subject to GST”: It means that only such educational services are in the negative list as are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualification prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of 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 grant of a recognized qualification.
Educational Institution means an instituion providing services by way of:
The institutions providing services by way of education as part of approved vocational course, and institutions providing the above courses will come within the ambit of the term educational institution. Notification No. 12/2017 - Central Tax (Rate) dated 28th June, 2017, defines approved vocational education course as:
The institutions, whose operations conform to the specifics given in the definition of the term “Educational Institution”, would be treated as one and entitled to avail exemptions provided by the law. This would mean that 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.
Educational institutions up to Higher Secondary School level do not suffer GST on output services and also on most of the important input services. Some of the input services like canteen, repairs and maintenance etc. provided by private players to educational institutions were subject to service tax in pre-GST era and the same tax treatment has been continued in GST regime.
The services of lodging/boarding in hostels provided by such educational institutions which are providing preschool education and education up to higher secondary school or equivalent or education leading to a qualification recognised by law, are fully exempt from GST. Annual subscription/fees charged as lodging/boarding charges by such educational institutions from its students for hostel accommodation shall therefore, not attract GST.
Output services related to the specified courses provided by IIM’s would be exempt. Executive Development Programs run by the IIM’s are specifically excluded, hence such courses would be subject to GST.
Education is fundamental to the nation building process. Right to Education is now a fundamental right of every child in India. GST Law recognises this and provides exemption to educational institutions,providing education up to higher secondary school or equivalent,from the levy of GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other services related to education, not covered by the exemption, would be taxed at a standard rate of 18% with full admissibility of ITC for such taxable services in cases where the output service is not exempt.
Education Services are under forward charge. Therefore, GST shall be paid by the supplier of services.
Education Services are classified in heading 9992 (as per Notification No. 11/2017-Central Tax (Rate)) and are further sub-divided into six groups comprising of Pre-primary, primary, secondary, higher, specialised and other educational & support services as below:
|Heading & Group||Service Code (Tariff)||Service Description|
|Heading no. 9992||Education Services|
|Group 99921||Pre-primary education services|
|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 n.e.c.|
|999295||services involving conduct of examination for admission to educational institutions|
|999299||Other Educational support services|
The rates of GST on education are as follows:
|Chapter/Section/Heading||Description of Service||Rate|
|9992||Education Services||18% (9% CGST + 9& SGST)|
(a) by an educational institution to its students, faculty and staf;
(b) to an educational institution, by way of
(i) transportation of students, faculty and staff;
(ii) catering, includ- ing any mid-day meals scheme sponsored by the Central Govern- ment, State Govern- ment or Union terri- tory;
(iii) security or cleaning or housekeeping services performed in such educational insti- tution;
(iv) 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.
|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|
|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 blindBraille instruments, paper etc.||5%|
|9023||Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses.||28%|
The place of supply of services provided by way of admission to an educational or any other place and services ancillary thereto, shall be the place where the event is actually heldor such other place is located.
the place of supply of services provided by way of (a) 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 (b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events:
The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held.
Charitable Trusts running institutions conforming to the definition of Educational Institution as specified in the notification would be entitled to the GST exemption.
Boarding schools provide service of education coupled with other services like providing dwelling units for residence and food. This may be a case of bundled services if the charges for education and lodging and boarding are inseparable. Their taxability will be determined in terms of the principles laid down in section 2(30) read with section 8 of the CGST Act, 2017. Such services in the case of boarding schools are naturally bundled and supplied in the ordinary course of business. Therefore, the bundle of services will be treated as consisting entirely of the principal supply, which means theservice which forms the predominant element of such a bundle. In this case since the predominant nature is determined by the service of education,the other service of providing residential dwelling will not be considered for the purpose of determining the tax liability and in this case the entire consideration for the supply will be exempt.
If a course in a college leads to dual qualification only one of which is recognized by law. Provision of dual qualifications is in the nature of two separate services as the curriculum and fees for each of such qualifications are prescribed separately. Service in respect of each qualification would, therefore, be assessed separately.
If an artificial bundle of service is created by clubbing two courses together, only one of which leads to a qualification recognized by law, then by application of the rule of determination of taxability of a supply which is not bundled in the ordinary course of business, it shall be treated as a mixed supply as per provisions contained in section 2(74) read with section 8 of the CGST Act, 2017. The taxability will be determined by the supply which attracts highest rate of GST.
Incidental auxiliary courses provided by way of hobby classes or extra-curricular activities in furtherance of overall well-being will be an example of naturally bundled course, and therefore treated as composite supply. One relevant consideration in such cases will be the amount of extra billing being done for the unrecognized component viz-a-viz the recognized course. If extra billing is being done, it may be a case of artificial bundling of two different supplies, not supplied together in the ordinary course of business, and therefore will be treated as a mixed supply, attracting the rate of the higher taxed component for the entire consideration.
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