Educational Institutions Under GST
As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, Educational Institution means an institution providing services by way of:
1. Pre-school education and education up to higher secondary school or equivalent;
2. Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
3. Education as a part of an approved vocational education course
As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, an “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.
|Chapter / Section / Heading||Description of Service||Rate / Notification|
|9992||Education Services||18% ( 9% Central Tax + 9% State Tax)/ Serial No. 30 of Notification No. 11/2017-Central Tax (Rate) dated 28th June, 2017|
|9992||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 Central Government, State Government or Union territory;
(iii) security or cleaning or housekeeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution; up to 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
|NIL / Serial No. 66 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017|
|9992||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: –
(a) two 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;
(b) fellow programme in Management;
(c) five year integrated programme in Management.
|NIL / Serial No. 67 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017|
|90 or any chapter||Technical aids for education, rehabilitation, vocational training and employment of the blind such as Braille typewriters, braille watches, teaching and learning aids, games and other instruments and vocational aids specifically adapted for use of the blind Braille instruments, paper etc.||5% of Schedule I of the Notification No.1/2017-Central Tax (Rate) dated 28th June, 2017|
|9023||Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses||28 % of Schedule IV of the Notification No.1/2017-Central Tax (Rate) dated 28th June, 2017|
So in view of the above,
1.Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be exempted from GST.
2. Training given by private coaching institutes or other unrecognised institution or self styled educational institution would not be exempted as such training does not lead to grant of a recognized qualification since private institute does not have any specific curriculum. (Recently held the same in Simple Rajendra Shukla (AAR Maharashtra 2018) and tax rate shall be 18%,the same was also confirmed in FAQ released by CBIC.)
3. Services provided by way of education as a part of a prescribed curriculum for obtaining a qualification recognized by a law of a foreign country are also not exempted because the course / degree not recognized by Indian Law.
4. Auxiliary education services (such as transportation of students faculty staff ,catering ,security ,cleaning ) entry no 66 of Notification No. 12/2017 of Central Tax Rate DT: 28.06.2017, if provided to educational institutions providing degree or higher education, the same would not be exempt from GST.
Following are not Exempt from GST:
Some other points to be kept in mind:-
GST on supply of food and drinks in Educational Institutions.
The Government of India Vide as per Circular No. 28/02/2018-GST Dated: 08.01.2018, clarified that supply of food or drink provided by a mess or canteen is taxable at 5% without Input Tax Credit [Serial No. 7(i) of Notification No. 11/2017-Central Tax (Rate) as amended vide Notification No. 46/2017-Central Tax (Rate) dated November 14, 2017]. It is immaterial whether the service is provided by the Educational Institution itself or the Institution outsources the activity to an outside contractor.
MY VIEW :-
Charitable Institutions U/S 12AA Under GST
The rates of GST on entities registered U/s 12AA of Income Tax Act 1961, (as per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and as per Notification No.09/2017- Integrated Tax (Rate) Dated: 28.06.2017) are as below:
|Chapter / Section / Heading||Description of Service||Rate / Notification|
|NIL / Serial No. 01 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017|
any other Heading of Section 9
|Services by a person by way of-
(a) conduct of any religious ceremony;
(b) renting of precincts (boundaries ) of a religious place meant for general public, owned or managed by an entity registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961 (hereinafter referred to as the Income-tax Act) or a trust or an institution registered under sub clause (v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause (23BBA) of section 10 of the said Income-tax Act:
Provided that nothing contained in entry (b) of this exemption shall apply to,-
(i) renting of rooms where charges are one thousand rupees or more per day;
(ii) renting of premises, community halls, kalyanmandapam or open area, and the like where charges are ten thousand rupees or more per day;
(iii) renting of shops or other spaces for business or commerce where charges are ten thousand rupees or more per month.
|NIL / Serial No. 13 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017|
|Heading 9996||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.
|NIL / Serial No. 80 of Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017|
|Chapter 99||Services received from a provider of service located in a non- taxable territory by –
(a) the Central Government, State Government, Union territory, a local authority, a governmental authority or an individual in relation to any purpose other than commerce, industry or any other business or profession;
(b) an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) for the purposes of providing charitable activities; or
(c) a person located in a non-taxable territory:
Provided that the exemption shall not apply to – (i) online information and database access or retrieval services received by persons specified in entry (a) or entry (b); or
(ii) services by way of transportation of goods by a vessel from a place outside Nil Nil 5 India up to the customs station of clearance in India received by persons specified in the entry
|NIL / Serial No. 10 of Notification No. 09/2017- Integrated Tax (Rate) dated 28th June, 2017|
As per Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, “Chartitable Activities” means activities relating to –
(i) public health by way of ,-
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion , spirituality or yoga;
(iii) advancement of educational programmes or skill development relating to,-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife;
Some points to be kept in mind:-
Education is fundamental to the nation building process. Right to Education is now a fundamental right of every child in India. GST Law recognises this and provides exemption to educational institutions, providing education up to higher secondary school or equivalent from the levy of GST. So, services provided by an educational institution to students, faculty and staff are exempt. The output services of lodging/boarding in hostels provided are fully exempt from GST. Auxiliary services received by such educational institutions for the purpose of education up to Higher Secondary level is also exempt from GST. Other services related to education, not covered by the exemption, would be taxed at a standard rate of 18% with full admissibility of ITC for such taxable services in cases where the output service is not exempt.