Goods and Services Tax – GST – By: – Dr. Sanjiv Agarwal – Dated:- 27-10-2016 – Present Taxation of Education Education in India is presently covered as one of the priorities of the Government and as such is allowed tax relief both in direct and indirect taxes. So far as indirect taxes are concerned, education is considered as a service and as such it is subject to levy of service tax. No other indirect tax is levied. For the purpose of service tax, education has been distinguished from coaching or training which facilitates the education. Presently, educational services are excluded from the levy of Service Tax and are in 'Negative List' under section 66D(i) which are related to delivery of education as a part of the curriculum that has been prescribed for obtaining a qualification prescribed by law. Conduct of degree courses by colleges, universities or institutions which lead to grant of qualifications recognized by law are also in negative list. Similarly , vocational train
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nal Skill Development Corporation; (iii) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation; (iv) a training partner approved by the National Skill Development Corporation or the Sector Skill Council in relation to – (a) the National Skill Development Programme implemented by the National Skill Development Corporation; or (b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or (c) any other Scheme implemented by the National Skill Development Corporation. The present rate of service tax is 15% including cesses viz Swachh Bharat Cess (SBC) and Krishi Kalyan Cess (KKC). Proposed GST Law According to the Model law on GST which neither contains the exemptions nor the rates of taxation as of now, it appears that all services in relation to coaching and training would be subject to levy of GST as the scope of service is very wide. However, the rates are expected to be in the range of
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vocational education course. Hence, the exemption may be restricted to activities or transactions done by Central Government, State Government or any Local Authority. It, therefore, appears that education services provided by Government will not be taxable. There is no specific provisions for inclusions or exclusions of coaching and training services or any other activity related to education elsewhere in the proposed law. Likely Impact in GST Regime Based on the provisions of Model Law, it can be said that education sector shall be impacted both positively and negatively under the GST regime. The rate of tax is likely to go up by 3-5% as it is expected that GST may be levied @18-20%. If coaching is considered as an essential service, a lower GST rate is not ruled out. There are likely to be concerns in valuation of coaching services in view of the industry practice of discounts / concessions / scholarship. The proposed valuation rules are different from the existing ones and as such c
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