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GST On Educational Services

GST on Educational Services

Educational institutions do a nation-building service when they prepare youngsters for a better future. Some services offered by these organizations are not taxable or exempt from GST.


What is an Educational Institution under GST?

An "educational institution" is defined under the GST as an establishment that provides services in any of the following fields:

  1. Type 1 - Pre-school education and education up to higher secondary school or equivalent (Eg. Schools);

  2. Type 2 - Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force( Eg. Collect and University or ICAI or ICSI);

  3. Type 3 - Education as a part of an approved vocational education course (Eg. Skill Centres approved by NSDC).


Exemption Entry 66 of Notification no. 12 CTR dated 28Th July 2017, following are exempt Services provided :

  1. by an educational institution to its students, faculty and staff;

  2. by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee

  3. to an educational institution, by way of, –

    • Transportation of students, faculty and staff

    • Catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory

    • Security or cleaning or house-keeping services performed in such educational institution

    • Services relating to admission to, or conduct of examination by, such institution

    • Supply of online educational journals or periodicals


Key Points to Note of Exemptions

  • Entry 1 and 2 is about services provided by the educational institutes and entry 3 is about services provided to the educationa instituates

  • Exemption of Providing Services to Educational Instituates relating to Transportation / Catering / Security / Houskeeping / Cleaning is exempt only if provided to Type 1 educational institutes providing pre-school and higher secondary education . Thus, no exemption if services are provided to other educational instituates like college or universities or skill centres.

  • Exemption of providing service of supply of online educational journals or periodicals are available only to Type 2 educational intitutes providing education as part of curriculum for obtaining recognized qualification.

  • Serivices provided to own students , faculty and staff is exempt from GST and not by one educational institue to another.


GST on Various Different Educational Services or Scenarios


Admission Fees / Tution Fees / Library Fees - Exempt.

Traing Fees from Teachers - Exempt.

Sale of Books - Exempt as sale of books is exempt under GST . GST rate is NIL on books.

Sale of Stationery / Uniforms to Students - Taxable as per applicable rates.

Fees for Anunal Function / Sports Day - Exempt if collected from student.

Hostel / Boarding or Logding Service - Exempt if provided to students , faculty and staff.

Bus Services by Bus Owner to Educational Institute - Exempt from GST

Advertisement Services - Taxable

Centeen Service to College - Taxable as canteen service is exempt only for pre-school and institutes providing upto higher secondary education.

Private Coaching - Private coaching and tutoring is taxable

Which Educational institutions required to be registered under GST?

1. Educational institutions must register under GST if they also offer other goods or services, such as sales of books, uniforms, etc. In these situations, the organization is required to impose GST on the extra goods or services rendered.

2. Where the educational institution is providing only education as a service then such fees are chargeable at NIL rate and such educational institutions are not required to be registered.

3. It is important to note that Registration Limit is determine by aggregate of taxable and exempt supplies and even if educational insitute provides taxable service of even Rs 100 than also it will be liable to register if exempt plus taxable service is more than Rs 20 Lakh.


 

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