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 ServicesHeading & GroupService Code (Tariff)Service DescriptionHeading no. 9992 Education servicesGroup 99921999210Pre-primary education servicesGroup 99922 Primary education services 999220Primary education servicesGroup 99923 Secondary Education Services 999231Secondary Education Services, General 999232Secondary Education Services, Technical and VocationalGroup 99924 Higher Education Services 999241Higher Education Services, General 999242Higher Education Services, Technical 999243Higher Education Services, Vocational 999249Other higher education servicesGroup 99925 Specialised education services 999259Specialised education servicesGroup 99929 Other education & training services and educational support services 999291Cultural education services 999292Sports and recreation education services 999293Commercial training and coaching services 999294Other education and training services 999295services involving conduct of examination for admission to educational institutions 999299Other 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/ HeadingDescription of ServiceRate / Notification9992Education Services18% ( 9% Central Tax + 9% State Tax)/ Serial No. 30 of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 20179992Services 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 equivalentNIL/Serial No. 66 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 20179992Services 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, 201790 or any chapterTechnical 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, 20179023Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses28 %/ 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.
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.
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