GST on Educational Services – A Quick Screener
Under the existing service tax legislation, the negative list of services (i.e. the list of services on which service tax is not leviable) includes Educational services subject to below mentioned conditions.
On a happy note, the recently circulated Notification No. 12/2017- Central Tax (Rate) of exempted services under Goods and Services Tax (‘GST’) includes these services too thereby implying that the Educational services would continue to be exempted even under the GST regime.
Notification No. 12/2017 – Central Rate.
Entry number 66 of the above mentioned Notification states that
Services provided,-
(a) by an educational institution to its students, faculty and staff;
(b) to an educational institution, by way of,-
(i) Transportation of students, faculty and staff;
(ii) Catering, including any mid-day meals scheme sponsored by the Government;
(iii) Security 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 clause (b) of this entry 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
Where
“educational institution” means an institution providing services by way of,-
(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;
Analysis
1.) Services provided by primary and higher secondary schools
As per the definition and Entry number 66 of the above mentioned notification it is cleared that any educational services provided by the Primary or higher secondary school to its students, staff and faculty is fully exempted
2.) Services provided to primary and higher secondary schools
Reading “provided” para of entry number 66 of notification gives the clarity that Only 4 types of services provided to the Primary and Higher Secondary School or equivalent will be exempted from the regime of GST
Exempted Services
- Transportation of students, faculty and staff;
- Catering, including any mid-day meals scheme sponsored by the Government;
- Security or cleaning or house-keeping services performed in such educational institution;
- Relating to admission to, or conduct of examination by, such institution; upto higher secondary
3.) Services Provided by Colleges And vocational Institute
Definition of “Educational Institute” includes services provided as a part of curriculum to obtain qualification and as a part of approved vocational course, which means educational services provided by the Colleges who are Giving Qualification degree (for example BBA & B.COM) and Government approved vocation centers can claim the Exemption Notification no 12/2017
4.) Services Provided to Colleges and Vocational Institute
Services provided to college and vocational institutes are fully taxable at the rate specified on the Notification no 11/2017- Central Rates. I.e. 18% (other services)
5.) Services provided by and to Private Institutes/Certificate courses/ Tuition centers
Definition of “Education institute” does not include private institutions not approved by any law/ certificate courses like tally courses/ coaching Classes irrespective for the purpose of such classes,
So it is safe to say that GST on above Services will be taxable as per the rate mentioned on Notification no. 11/2017 – Central Rates. I.e. 18%
Now question remains open for the institute who are providing duel course or integrated course along with the foreign Universities, are they also exempted under GST, if not then what will be the tax rate on them and how taxable and exempted supply will be apportioned
“Education is the most powerful weapon which you can use to change the world.” –Nelson Mandela
Related Tags CA Ankit Gulgulia, CGST
