GST on Education Services
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Forty
GST on Education Services
“Education” is not defined in the CGST Act but as per Apex Court decision in “Loka Shikshana Trust v/s CIT” = 1975 (8) TMI 1 – SUPREME COURT, education is process of training and developing knowledge, skill and character of students by normal schooling.
Taxing the Education Sector has always been a sensitive issue, as education is seen more as a social activity than a business one. The government has a constitutional obligation to provide free and compulsory elementary education to every child. Thus, to promote education, it would be beneficial if educational services are exempted from tax. However, commercialisation of education is also a reality. The distinction between core and ancillary education is blurring and education is now an organised industry with huge revenues. The GST Act tries to maintain a fine balance whereby core educational s
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p;
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
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/
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p 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 ai
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education as a part of curriculum for obtaining a qualification recognised by any law for the time being in force. This is an area where doubts have persisted as to what would be the meaning of “education as part of curriculum for obtaining qualification recognised by law”. GST on services being a legacy carried forward from the Service Tax regime, the explanation given in the Education guide of 2012 can be gainfully referred to understand the meaning of the term which reads as under;
What is the meaning of 'education as a part of curriculum for obtaining a qualification recognized by law'?
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
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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); or
(ii) 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.
It is to be noted that only those 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.
Thus, educational institutions up to Higher Secondary School level do not
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s, 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. The four categories of services known as Auxiliary Education services, which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, have been exempted (as per Notification No. 12/2017- Central Tax (Rate)). Auxiliary education services other than what is specified above would not be entitled to any exemption. The exemption also comes with a rider. Such services are exempt only for educational institutions providing services by way of education up to higher secondary or equivalent. (from pre-school to HSC).
Thus if such auxiliary education services are provided to educational institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are
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the events or services referred to in clause (a), or assigning of sponsorship to such events, –
i. to a registered person, shall be the location of such person;
ii. 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.
What will be the Place of supply of Educational Services where the location of the supplier of services or the location of the recipient of services is outside India?
As per section 13(5) of the IGST Act, 2017, 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.
Educational Institution run by charitable organizations.
Charitable Trusts
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ovide 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 the service 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.
Let's take another example where a course in a college leads to dual qua
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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.
The Education guide of 2012 for the purpose of service tax has given the following important clarifications in respect of educational services. The same can be gainfully referred to, for the purpose of clarity under the GST regime:
“The supply of placement services provided to educational institutions for securing job placements for the students shall be liable to service tax. Similarly, educational institutes such as IITs, IIMs charge a fee
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