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In Depth Analysis of GST on Educational Institutions

Narendra Kumar

| Updated: Jun 28, 2019 | Category: GST Registration

Educational Institutions

Basic educational services have always been a part of exemption category since it forms the basis of knowledge, training and growth of any individual. Whether it was service tax or its GST now, government has been kind enough to identify the essence of educational services and have kept basic educational services under exempt category which means GST on Educational Institutions will not be charged. What comprises of such basic educational institutions services is discussed below along with comprehensive details of all the relevant provisions applicable on educational services in India.

Coverage under this topic:

  1. Meaning of Educational Institutions
  2. What are the exemptions available to Educational Institutions?
  3. GST Applicability on Private Coaching Centers
  4. GST Applicability on Higher Education
  5. Other Exemptions to Education Institutions

Meaning of Educational Institutions

“Educational Institution” means an institution providing service by way of –

  • Pre- School E and higher secondary school education or equivalent. It means Indian schools following CBSE or state curriculum plus International school following equivalent school education are covered.
  • When Education is a part of curriculum for obtaining a qualification recognized by any law for the time being in force. It means educational institutions post school e,g college, universities, ICAI, ICSI , Law colleges /universities , engineering institutes , medical institutes etc are covered. Indian institutes are covered as only they are providing qualification recognized by Indian law. It means foreign institutions are not covered.

Qualification recognized by any law (Indian Law) = such courses are approved or recognized by an entity established under a central/state law including delegated legislation for granting recognition to any educational course.

  • Approved Vocational Education Courses. Vocational education course means.
    • Course run by Industrial training institute or industrial training centre.
    • A Modular employable skill course approved by National council for vocational course where person running such MESC is registered with Director General of Training, Ministry of Skill Development and Entrepreneurship.

Following are the situations of Institutions not covered by above definition of Vocational Educational Course:

Centre running type/private institute/shorthand courses Not exempt as not an ITI/ITC , not registered with DGT  
Courses by Air Hostess Academy Not exempt as not an ITI/ITC , not registered with DGT  
Saraswati Academy running Tally courses Not exempt as not an ITI/ITC , not registered with DGT  
MAYA Academy running Animation courses Not exempt as not an ITI/ITC , not registered with DGT  

Exemptions available to Educational Institutions

GST on Educational Institutions

Provided that nothing contained in point (1),(2)  and (3) above 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 .

Provided further that nothing contained in point (5) above shall apply to an institution providing services by way of –

Pre- school education and education up to higher secondary school and equivalent  or

Education as a part of an approved vocational education course.

Exemption to Charitable trust a school, college or education institution for abandoned , orphans, homeless children, physically or mentally abused persons, prisoners or persons over the age of 65 years or above residing in rural area, run by a charitable trust is exempt from GST.

Government or municipals schools run by government, or local authority or governmental authority are kept outside the scope of supply hence exempt from GST on Educational Institutions.

Also Read:

All about 35th GST Council Meeting Overview
Compulsory Withdrawal from GST Composition Levy: FAQs
GST Sahaj Return Filing Form – Due Date, Benefits, Eligibility, Format
GST Sugam Return Filing Form Introduced by the Government

Applicability of GST on Private Coaching Centers

Private Coaching institute /centre providing tuitions up to 12th class   Not Exempt (it is not education by school )-CBEC
Private Coaching institute /centre providing tuitions to CA Students   Not Exempt
Private Coaching institute /centre providing vocational courses –like mobile repair, plumbing etc Not Exempt
GST on Educational Institutions

Applicability of GST on Higher Education

  • Services provided to higher educational institutions are taxable.
Supplier Recipient Remarks
Transporter (hired by educational institution for transportation of students , faculty or staff ) Pre-School/Higher secondary school Transporter providing services to pre-school/higher secondary school-EXEMPT   Transporter providing services to college /ICAI/Educational institutions running approved VEC –GST PAYABLE
Caterer (hired by educational institution for supply of food/drink) Pre-School/Higher secondary school Same as above
Security Agency (hired by educational institution for security within EI) Pre-School/Higher secondary school Same as above
Cleaning or housekeeping agency(hired by educational institution for security within EI) Pre-School/Higher secondary school Same as above
Providing admission related /conduct of exam related services Each Category Educational Institution ABC conducts entrance exam for school-EXEMPT   ABC conducts entrance exam for ICAI and charges for that-EXEMPT   ABC conducts entrance exam for Educational institution running approved vocational educational course-EXEMPT
OIDAR services of supply of online educational Journals/periodicals (hired by EI for its library) Educational Institution (Post School)-Providing recognized legal qualifications OIDAR service of online educational journals/periodicals to school-GST payable   OIDAR service of online educational journals/periodicals to school-EXEMPT OIDAR service of online educational journals/periodicals to EI running approved VEC-GST payable          
  • Services provided by an educational institution are kept outside GST ambit.
Supplier Recipient Examples
Specified Educational Institution Student Tuition fee, transportation, picnic charges, annual function charges, canteen charges, hostel charges -EXEMPT
Specified Educational Institution Faculty Transportation, food facility, others if any-EXEMPT
Specified Educational Institution Staff Transportation, food facility, others if any-EXEMPT
Specified Educational Institution Prospective Student Entrance test, examination fees-EXEMPT
  • When Services are Provided by Indian Institutes of Management (IIM), as per the guidelines of the central government , to their students, by way of the following educational programmes. (Executive Development programme is not covered ) :
    • Residential post graduate programmes in management of two year (full time) in which admissions are granted on the basis of Common Admissions test conducted by  Indian Institute of Management. ;
    • Fellow programme in management;
    • Integrated programme of five years in management.
GST on Educational Institutions

Other Exemptions to Educational Institution

Any services provided by

  • Government set up National Skill Development Corporation;
  • National Skill sector council approved sector skill council;
  • National Skill or sector skill council approved assessment agency;
  • The National Skill Development Corporation or the Sector Skill Council approved training partners
  • The National Skill Development Programme implemented by the National Skill Development Corporation; or
  • A vocational skill development course under the National Skill Certification and Monetary reward scheme; or
  • Any other scheme implemented by the National Skill Development Corporation.
  • Assessing bodies empanelled centrally by directorate general training, ministry of skill development and entrepreneurship by way of assessment under skill development initiative scheme.
  •  Ministry of rural development in the form of training ( project implementation agencies ) under the Deen Dayal Upadhaya by way of offering skill or vocational training courses certified by national council for vocational traning.

Also Read: Impact of GST on Sales Promotion Schemes in India

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Narendra Kumar

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