By CA Ankit Gulgulia (Jain)
Concept of education under GST
The CGST Act does not define education, so courts and policy documents fill the gap. The Supreme Court in Sole Trustee, Loka Shikshana Trust v. CIT described education as systematic instruction or training to prepare the young for the work of life, which remains the touchstone for interpreting education in tax law. Under GST, this understanding underpins the policy that core, formal education should remain non‑taxed to preserve affordability and public welfare.
Notification No. 12/2017‑Central Tax (Rate) (hereafter “Notification 12/2017‑CTR”) is the primary exemption notification for services, with Entry 66 under Heading 9992 governing education services. Paragraph 2(y) of this notification defines “educational institution” (EI) functionally, not by ownership or profit motive, as entities providing: (i) pre‑school and up to higher secondary education, (ii) education as part of a curriculum for a qualification recognised by law, and (iii) approved vocational education courses.
Classification of education services (Heading 9992)
The GST rate and exemption analysis begins with correct classification under Heading 9992 of the Scheme of Classification of Services. Heading 9992 covers “Education services”, which are further sub‑classified into groups and specific service codes.
Key groupings include:
- Group 99921: Pre‑primary education services (999210).
- Group 99922: Primary education services (999220).
- Group 99923: Secondary education, including general (999231) and technical/vocational streams (999232).
- Group 99924: Higher education, with separate codes for general (999241), technical (999242), vocational (999243), and other higher education services (999249).
- Group 99925 and 99929: Specialised and “other educational and training services and educational support services”, including cultural, sports, commercial coaching, examination conduct, and other support services.
This classification framework is crucial because the same legal entity can render both exempt and taxable services (for example, exempt degree programmes and taxable short‑term certificate courses).
Core exemptions: Entry 66 of Notification 12/2017‑CTR
Entry 66 of Notification 12/2017‑CTR lays down the main exemptions for education services under Heading 9992. It has three primary legs:
- Clause (a): Services “by” an EI to its students, faculty and staff.
- Clause (aa): Services of conduct of entrance examinations by specified authorities/boards.
- Clause (b): Specified input services “to” an EI, subject to conditions.
A. Output services by educational institutions (Entry 66(a) and (aa))
- Services by EI to students, faculty, staff
Entry 66(a) exempts all services provided by an educational institution to its students, faculty and staff, without restricting the nature of those services. Once an entity qualifies as an EI under para 2(y), any consideration received from its own students, faculty or staff in the course of education is exempt.
Examples of exempt receipts from students, faculty and staff include:
- Tuition, exam, library, laboratory and transport fees.
- Catering and mess services provided by the EI itself to students and staff (clarified through Circular dated 08.01.2018, corrected on 18.01.2018).
- Admission fees, application fees for entrance/eligibility, migration certificates, term‑end related charges, and similar amounts linked to the academic process (clarified in Circular No. 177/09/2022‑GST).
- Integrated boarding school offerings where education is coupled with lodging and food as a composite supply, with education as principal supply.
Further clarifications have extended the EI concept to certain specialised institutions when they provide recognised qualifications:
- Long‑duration diploma/degree/certificate programmes of IIMs, IITs and similar institutes, recognised by law (e.g., IIM Act, 2017), are treated as exempt EI services, and attendees are treated as “students”.
- Maritime training institutes offering DG Shipping‑approved courses recognised under the Merchant Shipping Act, 1958 are treated as EIs for such courses.
- DGCA‑approved flying training courses conducted by FTOs, where completion certificates are mandated by DGCA, are treated as exempt education services by virtue of Circular 234/28/2024 and corresponding notification amendments.
However, short‑term executive programmes, MDPs and similar offerings by IIMs/IITs that only culminate in a participation certificate not recognised by law remain taxable, with participants treated as “participants” and not “students”.
Critically, services by an EI to any person other than its own students, faculty or staff do not fall under Entry 66(a).
- For example, campus interview facilities provided to corporate recruiters, training programmes for external organisations, or hall rental to third parties are taxable, even if the provider is an EI.
- Services by way of entrance examinations (Entry 66(aa))
Entry 66(aa) exempts services by way of conduct of entrance examinations against consideration in the form of entrance fee. Circular No. 151/07/2021‑GST clarified that the National Board of Examinations is an EI insofar as it conducts examinations, and its fees for such exams are exempt.
Further, Notification No. 01/2023‑CTR inserted an explanation that any authority/board/body set up by Central or State Government, including the National Testing Agency, for conducting entrance examinations for admission to EIs shall be treated as an EI for this limited purpose. Thus, application and exam fees for such entrance tests are treated as exempt services of an EI.
- Affiliation services: a new sub‑entry (Entry 66A)
Notification No. 08/2024‑CTR inserted Entry 66A exempting “services of affiliation” provided by a Central or State Educational Board or Council or similar body to schools established, owned or controlled by Government, local authority, governmental authority or government entity. This exemption is narrow in scope:
- Affiliation is characterised as administrative oversight (verification of infrastructure, academic standards, faculty norms, etc.), not direct delivery of education or examination.
- Circular No. 234/28/2024 clarified that affiliation services are generally taxable at 18%, and only those provided to government schools as specified in Entry 66A are exempt.
- Affiliation services by universities to affiliated or constituent colleges are not covered by Entry 66 or 66A and remain taxable.
B. Input services to educational institutions (Entry 66(b))
Entry 66(b) of Notification 12/2017‑CTR specifies certain input services that when supplied “to” an EI are exempt. However, these exemptions are restricted and subject‑to‑type‑of‑EI conditions.
The exempt input services are:
- Transportation of students, faculty and staff to the EI.
- Catering, including mid‑day meal schemes sponsored by Government and food supplied to Anganwadis, whether Government‑sponsored or corporate donation funded (as per Circular No. 149/05/2021‑GST).
- Security, cleaning or housekeeping services performed in such EI.
- Services relating to admission to or conduct of examinations by such EI.
- Supply of online educational journals or periodicals to specified EIs.
The scope is sharply cut in two ways:
- Transportation, catering, and security/housekeeping input exemptions apply only to EIs providing pre‑school and education up to higher secondary or equivalent.
- Security/housekeeping exemption applies only if services are performed within the school campus; services outside the premises are taxable.
- Exemption for online educational journals and periodicals does not apply to pre‑school/10+2 EIs or approved vocational EIs, but only to institutions imparting education as part of a curriculum for a qualification recognised by law.
Additionally, Entry 1(ba) of Notification 09/2017‑Integrated Tax (Rate) extends exemption to import of such online journals/periodicals by eligible EIs, mirroring the domestic exemption.
Other education‑linked exemptions
Beyond Entry 66, the GST framework contains targeted exemptions for allied educational, skill development, research, and training activities, often implemented via Entries 69–72, 80, 22(c), and newly inserted 44A.
A. Skill development and vocational initiatives (Entries 69, 70, 71)
Entry 69 of Notification 12/2017‑CTR covers skill development services provided by:
- National Skill Development Corporation (NSDC).
- National Council for Vocational Education and Training (NCVET).
- Awarding bodies and assessment agencies recognised by NCVET.
- Training bodies accredited with such awarding bodies.
- Training partners approved by NSDC (explicitly added by Notification 06/2025‑CTR).
These services are exempt when related to:
- National Skill Development Programme or other NSDC‑implemented schemes.
- Vocational skill development courses under the National Skill Certification and Monetary Reward Scheme.
- NSQF‑aligned qualifications or skills approved by NCVET.
Entry 70 exempts services of assessing bodies empanelled centrally by Directorate General of Training (DGT), Ministry of Skill Development, for assessments under the Skill Development Initiative Scheme. Entry 71 exempts services of project implementation/training providers under Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU‑GKY) for NCVET‑certified skill/vocational courses.
B. Research and development services (Entry 44A)
Notification 08/2024‑CTR inserted Entry 44A under Heading 9981, exempting research and development services against consideration received as grants, when supplied by:
- A Government entity; or
- A research association, university, college or other institution notified under clauses (ii) or (iii) of section 35(1) of the Income‑tax Act, 1961.
The condition is that the entity must hold the section 35 notification at the time of supply of the R&D service. This provision is important for publicly funded R&D ecosystems in higher education and research institutions that often operate on Government grants rather than commercial contracts.
C. Training and recreational coaching (Entry 80 and related provisions)
Entry 80 exempts services by way of training or coaching in recreational activities relating to arts or culture by an individual, and in sports by charitable entities registered under sections 12AA/12AB of the Income‑tax Act. The converse implication is that similar activities, when provided by non‑individuals (for arts/culture) or non‑charitable entities (for sports), are taxable.
Additional related exemptions include:
- Entry 68: Services by an individual as player, referee, umpire, coach or team manager to a recognised sports body for participation in a sporting event, which are exempt.
- Entry 1: Services by charitable/religious trusts registered u/s 12AA/12AB by way of advancement of educational programmes/skill development for specific vulnerable categories (abandoned children, abused persons, prisoners, and rural elderly) are exempt.
Entry 72 exempts services provided to Government/UT administration under training programmes where 75% or more of the total expenditure is borne by Government. Circular 164/2021‑GST clarified that free coaching services by coaching institutions/NGOs under the “Scholarships for Students with Disabilities” scheme, where 75% or more expenditure is Government funded, are covered and hence exempt.
D. Hiring of motor vehicles (Entry 22(c))
Entry 22(c) provides exemption for services of giving on hire a motor vehicle for transport of students, faculty and staff, to a person providing transportation services to an EI providing pre‑school or up to higher secondary education. If such hiring services are supplied for transportation to any other kind of EI (for example, degree colleges), the exemption does not apply and the service is taxable.
Taxable education services: commercial coaching and non‑core activities
For practitioners and educational enterprises, a critical compliance issue is demarcation of taxable education services that fall outside the protective scope of Entry 66.
A. Commercial training and coaching
Private coaching centres, tuition centres, professional training institutes, exam‑preparatory/tutorial classes that are not recognised as educational institutions under para 2(y) do not qualify for exemption. Their services are classified largely under Group 99929 (e.g., 999293 commercial training and coaching services) and are subject to GST, typically at 18%.
Distance education or correspondence courses run by private providers are taxable unless the course is part of an approved curriculum leading to a recognised qualification. Likewise, collaborative diploma/certificate courses with foreign universities remain taxable unless specifically recognised by domestic statutory bodies such as UGC or AICTE; a foreign‑accepted diploma alone does not make it “recognised by law for the time being in force”.
B. Short‑term programmes by recognised institutions
IIMs, IITs and similar institutions often run short‑duration programmes (executive development programmes, workshops, MDPs) that culminate in mere “participation certificates”. Circular 08/2019 clarified that such programmes do not lead to a recognised degree/diploma and do not enjoy exemption under Entry 66; they are taxable, and the attendees are “participants” rather than “students”.
C. Non‑core services of educational institutions
Even where the provider is a recognised EI, services rendered to non‑students or services beyond the scope of education often remain taxable. Examples include:
- Campus hiring services to corporates.
- Letting of premises for fairs or commercial events not directly connected with education.
- Consultancy services to external bodies.
These activities are treated like any other B2B/B2C taxable supply and may also require separate registration where business is clearly bifurcated.
Place of supply, ITC and compliance considerations
Though the article focuses primarily on exemption and classification, the GST framework around education also implicates place of supply and input tax credit.
A. Place of supply for education services
As per section 12(6) of the IGST Act, the place of supply of services provided by way of admission to, or organisation of, an educational event or ancillary services is the location where the event is actually held. For B2B educational event services not covered by admission, the place of supply is the recipient’s location, while for B2C it is where the event is held. These rules are critical for cross‑border conferences, online programmes or residential programmes held in different States.
B. Input tax credit (ITC)
Given that core EI output services are largely exempt under Entry 66(a), EIs often operate in an “exempt output” environment, leading to blocked ITC on input services and capital goods. In contrast, commercial coaching providers and taxable segments of EIs can avail ITC subject to usual restrictions, but must maintain robust records to segregate common credits between exempt and taxable activities under rules 42–43 of the CGST Rules. This credit structure explains why the State collects substantial GST (around ₹4,792.40 crore in FY 2023‑24) from non‑exempt segments of the education sector, despite broad headline exemptions.
Policy objective and evolving jurisprudence
The Indian GST framework around education attempts to balance competing objectives of social welfare, revenue mobilisation, and market neutrality.
Key policy features include:
- Shielding core school and degree‑granting education from GST to preserve access and affordability.
- Recognising skill development, R&D, and Government‑funded training as public goods meriting exemption, hence Entries 69–71 and 44A.
- Taxing commercial coaching, unrecognised programmes, affiliation services (except for specified Government schools) and ancillary activities to maintain fiscal neutrality and discourage abuse of “education” labels.
Circulars such as 151/07/2021‑GST, 164/2021‑GST and 234/28/2024‑GST, along with rate amendments in Notifications 08/2024‑CTR and 06/2025‑CTR, show that the law in this space is dynamic and responsive to sectoral representations and GST Council recommendations.
In sum, the GST regime for education in India is a finely calibrated framework where the classification of services, factual character of programmes, statutory recognition of qualifications, and the precise identity of recipients (students vs participants vs third parties) determine whether a given supply is fully exempt, partially protected, or fully taxable. For practitioners, the compliance edge lies in meticulously mapping each educational and allied activity to the correct notification entry, circular, and service code, rather than assuming a blanket exemption merely because the word “education” appears in the provider’s name or objects
Disclaimer – Above Article is Only for Educational Purpose. Do your Own Study before any Decision Making.
FCA, CWM (AAFM-US), CBV, CIFRS, R-ID, B.COM (H), RV* (IBBI)
Practising Chartered Accountant in Delhi NCR Since 2011. He can be contacted at ankitgulgulia@gmail.com or +91-9811653975.