GST – GST Law and Procedure – 040 – 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 services provided and received by educational institutions are exempt an
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her 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. 12/2017-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
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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 %/ Seri
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he 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 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. Are 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
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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 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. Thus output services of lodging/boarding in hostels provided
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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 providing qualification recognized by law for the time being in force shall not be liable to GST. Who will pay GST? Education Services are under forward charge. Therefore, GST shall be paid by the supplier of services. What will be the Place of Supply of Educational Services where the location of supplier of services and the location of the recipient of services is in Ind
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e 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 running institutions conforming to the definition of Educational Institution as specified in the notification would be entitled to the exemptions discussed above. Apart from the general exemption available to all educational institutions, charitable activities of entities registered under Section 12AA of the Income Tax Act is also exempt. The term charitable activities are also defined in
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ools 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 qualification only one of which is recognized by law. Would service provided by the college by way of such education be covered by the exemption notification? 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 separa
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rdinary 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 from prospective employers like corporate houses/ MNCs, who come to the institutes for recruiting candidates through campus interviews in relation to campus recruitments. Such services shall also be liable to service tax. Conclusion. 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
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