GST on Education in India : Deep Analysis

By | December 21, 2017
(Last Updated On: December 21, 2017)

GST on Education

Analysis of GST on Education in India

Is  Word “ Education “ Defined under GST Act ?

Education” is not defined in the CGST Act but as per Supreme Court decision in “Loka Shikshana Trust v/s CIT”, education is process of training and developing knowledge, skill and character of students by normal schooling.

Is there any GST on Education Services ?

Yes

Education services is covered in Service Accounting Code 9992

Group 99921:  Pre-primary education services

 999210 : Pre-primary education services

Group 99922 : Primary education services

 999220 : Primary education services

Group 99923 : Secondary Education Services

 999231: Secondary education services, general

 999232 : Secondary education services, technical and vocational

Group 99924 : Higher education services

 999241 : Higher education services, general

 999242 : Higher education services, technical

 999243 : Higher education services, vocational

 999249 : Other higher education

Group 99925 : Specialised education services

 999259 : Specialised education services

Group 99929 : Other education and 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 nowhere else classified

 999295 : Services involving conduct of examination for admission to

 educational institutions

 999299 : Other educational support services

[ As per SR No 581 of Annexure to Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017  ]

What are the GST Rates on Education Services ?

CGST Rate is 9% and SGST Rate 9% / IGST Rate 18% on Education services.

[ As per Sr No 76  of Notification No 11/2017 Central Tax (Rate) Dated 28th June 2017  and Notification No 8/2017 Integrated Tax (Rate) Dated 28th June, 2017]

Who will pay GST on Education Services ?

Education Services are under forward charge.

Therefore, GST shall be paid by the supplier of services.

Is there any Exemption from GST on Education Services ?

There is  Exemption from GST on following :

A) Exemption from GST on services provided by  and to educational institution

Services provided –

(aby an educational institution to its students, faculty and staff;

(bto an educational institution, by way of,-

(itransportation of students, faculty and staff;

(iicatering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;

(iiisecurity or cleaning or house- keeping services performed in such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution; upto 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 equivalent.

“educational institution” means an institution providing services by way of,—

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) educationasa part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

(iii) education as a part of an approved vocational education course;

[ Clause 2(y)]

Meaning of ” education as a part of a curriculum for obtaining a qualification recognised by any law “: 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.

Note: Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification.

Note: a course should be recognized by an Indian law not by  foreign country 

[Refer : Education guide of 2012  of service Tax ]

approved vocational education course” means,—

(i) 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); 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;[ Clause 2(h)]

Note : 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.

[ As per Sr No 66 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

B. Exemption from GST on Services provided by the Indian Institutes of Management

There is  Exemption from GST on following :

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: –

(atwo 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;

(bfellow programme in Management;

(cfive year integrated programme in Management.

[ As per Sr No 67 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

C. Exemption from GST on services by National Skill Development Corporation

There is  Exemption from GST on following :

Any services provided by, _

(a) the National Skill Development Corporation set up by the Government of India;

(b) a Sector Skill Council approved by the National Skill Development Corporation;

(c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;

(d) a training partner approved by the National Skill Development Corporation or the Sector Skill Council, in relation to-

(i) the National Skill Development Programme implemented by the National Skill Development Corporation; or

(ii) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or

(iiiany other Scheme implemented by the National Skill Development Corporation.

[ As per Sr No 69 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

D. Exemption from GST on Services under Skill Development Initiative Scheme

There is  Exemption from GST on following :

Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under the Skill Development Initiative Scheme.

[ As per Sr No 70 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

E. Exemption from GST on services under Deen Dayal Upadhyaya Grameen Kaushalya Yojana

There is  Exemption from GST on following :

Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana implemented by the Ministry of Rural Development, Government of India by way of offering skill or vocational training courses certified by the National Council for Vocational Training.

[ As per Sr No 71 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

F. Exemption from GST on Training Services to Government

There is Exemption from GST on following :

Services provided to the Central Government, State Government, Union territory administration under any training programme for which total expenditure is borne by the Central Government, State Government, Union territory administration.

[ As per Sr No 72 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

G. Exemption from GST on  services in recreational activities 

There is  Exemption from GST on following :

Services by way of training or coaching in recreational activities relating to—

(a) arts or culture, or

(b) sports by charitable entities registered under section 12AA of the Income-tax Act.

[ As per Sr No 80 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

H. Exemption from GST on Services by National Centre for Cold Chain Development

There is  Exemption from GST on following :

v Services provided by the National Centre for Cold Chain Development under the Ministry of Agriculture, Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination  [ Sr No 53 ]

[ As per Sr No 53  of Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

Is there any GST on hostel accommodation  Services provided by an educational institution to students, faculty and staff ?

Services provided by an educational institution to students, faculty and staff are fully exempt. Educational institution has been defined as an institution imparting

(i) pre-school education and education up to higher secondary school or equivalent;

(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

(iii) education as a part of an approved vocational education course.

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.

Annual subscription/fees charged as lodging/boarding charges by such educational institutions from its students for hostel accommodation shall not attract GST.

[ As per Press Release by Ministry of Finance on 13.07.2017 : GST on Hostel Services  ]

Is there any GST on Educational Institution run by charitable organizations ?

Charitable Trusts running Educational Institution 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 the notification. Thus, 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 

[As per Sr No 1 Notification No 12/2017 Central Tax (Rate) Dated 28th June 2017 and Notification No 9/2017 Integrated Tax (Rate) Dated 28th June, 2017 ]

 

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