Providing basic Education is a constitutional obligation of Government therefore by taxing education, this fundamental right for education is violated. Not just that, there would be disparity in society with respect to education between rich and poor if it is made costlier. However, we cannot deny the fact that education has been commercialised in the current scenario. There is already disparity between education provided in urban vs rural. Government has to be careful while providing exemption to educational institutions at the same time taxing the commercial aspects of it.
The following services provided by an Educational Institution has been exempted vide entry 66 and 67 of Notification No. 12/2017-CT(R) dated 28 June 2017/ Notification No. 09/2017-IT(R)
Now, basis the exemption notification it is very clear that not every service provided by Educational institutions are exempt. The following services are exempt mainly:
Entry No 66
Services provided –
(a) by an educational institution to its students, faculty and staff;
(aa) by an educational institution by way of conduct of entrance examination against consideration in the form of entrance fee;
(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 house-keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution;
(v) supply of online educational journals or periodicals:
Provided that nothing contained in [sub-items (i), (ii) and (iii) of item
(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.
Provided further that nothing contained in sub-item (v) of item (b) shall apply to an institution providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent; or
(ii) education as a part of an approved vocational education course.
Entry 67
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 years integrated programme in Management
In relation to this exemption entry, the following terms have been defined in the
aforesaid exemption notification :
(y) “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;
(h) “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;
There are activities and services provided by Educational Institutions other than what is listed above like
1. Letting out Auditorium and class rooms for external parties
2. Conducing private coaching
3. Conducting of private classes on improvement of English, tally skills, accounting skills etc., by charging fees
4. Letting out computer labs
5. Letting out space for putting up book/stationery shops etc.,
6. Sale of stationery and books
7. Catering services provided in the premises by an external vendor
8. Conducing sports/music/dance academy by charging fees
9. Collecting sponsorship for annual fest, sports day etc.,
10. Collecting franchise fee for using brand name
The above are just a limited list but these services are commonly seen in the private schools specially in urban areas. Now are these services exempt? As mentioned in the notification only services provided in course of preschool education, higher education and education as part of a curriculum for obtaining qualification recognized by any law for time being in force are exempt. Therefore, in my opinion the services listed above like letting out of premises, sponsorship etc., are purely commercial in nature and attract GST however some of the Educational Institutions may have taken a stand that any services provided by Educational Institution are exempt but which may not go in line with the exemption notification.
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