Introduction: Delve into the intricacies of the 18% GST on education in India. Uncover the rationale behind taxing private institutions, coaching centers, and materials. Gain insights into GST rates, exemptions, and the eligibility for refunds.
GST on Education Services
Why there is 18 GST on education?
Private institutions as well as coaching centres don’t have any particular curriculum and they do not conduct any examination on their own or award any qualification. Hence the GST taxable to then is 18 percent.
Distance / Correspondence Education is taken up usually for higher education and hence GST is taxed rate of 18 percent.
What is the GST rate on educational materials?
Under Goods and Services Tax, educational materials are taxed at 12 percent. it includes items such as pencils, pens, erasers, textbooks and notebooks.
What is the GST rate for online education?
Coaching centres and private institutions don’t have any specific curriculum and they don’t conduct any examination or provide any qualification. Hence these services are taxed at 18%. Also, distance education taken up for higher education is taxable at the GST rate of 18%.
Which services are exempted from GST?
Below is the list of the services which are exempted from GST:
|
Types of services |
Examples |
| Agricultural services | Cultivation, supplying farm labour, warehouse-related activities, harvesting, leading or renting agricultural machinery, services provided by the Agricultural Produce Marketing Committee or Board or commission agent for selling or buying agriculture produce, etc. |
| Government services | Postal service, transportation of goods or people, services offered by the Reserve Bank of India, services by a foreign diplomat in India, services offered to diplomats, etc. |
| Transportation services | Transportation of goods by rail, road, water, etc., payment of toll, transportation by air, transportation of goods where the total cost of such transport does not exceed INR 1500. |
| Judicial services | Services offered by an arbitral tribunal, senior advocates, or partnership firm of advocates to an individual or business entity whose annual turnover does not exceed INR 40 lakhs |
| Educational services | Transportation of students or faculty, examination services, mid-day meal scheme, services offered by the Indian Institute of Management (IIM), etc. |
| Medical services | Services are offered by ambulances, veterinary doctors, charities, and medical professionals, excluding cosmetic or plastic surgery or hair transplants. |
| Organizational services | Services that are offered by exhibition organizers for international business exhibitions, tour operators for foreign tourists, etc. |
| Other services | Services offered by GSTN to the State or Central Government or the Union Territories, circuses, sports events, etc. admission fee payable to theatres, which charge a fee up to INR 250 |
What is the GST rate for school notebooks?
The GST rate on notebooks is 12 percent.
Is educational services exempt from GST?
In India, the right to education for every child is enshrined in the Constitution, solidifying its importance as a cornerstone of national development. Reflecting this commitment, the Goods and Services Tax (GST) law exempts educational institutions that provide schooling up to higher secondary or equivalent levels from the levy of GST. This exemption incentivizes affordable access to quality education, fostering an educated citizenry crucial for India’s future.
What are the 4 types of GST?
The Four Different Types of GST Tax in India are:
1. CGST (Central): Shared tax on intra-state goods, levied by both Central & State governments.
2. SGST (State): Additional tax on intra-state goods, specific to each state.
3. IGST (Integrated): All-inclusive tax for inter-state and import/export transactions.
4. UTGST (Union Territory): Similar to SGST, but for transactions within Union Territories.
What is the limit of GST for professional services?
For businesses operating in most of the states, the threshold limit for GST registration is the yearly turnover of INR. 20 lakhs for the supply of services.
The threshold for GST registration for professional services is dependent on the Indian state in which a service provider operates:
- Special states: The limit is INR 10 lakhs in annual aggregate turnover. These states include:
- Arunachal Pradesh
- Manipur
- Meghalaya
- Mizoram
- Nagaland
- Sikkim
- Tripura
- J&K, Ladakh, and Assam: These states follow the INR 20 lakhs threshold.
It’s crucial to note that exceeding these thresholds doesn’t only make GST registration compulsory but also liable to collection and deposit of tax on taxable services provided.
How is GST calculated?
Calculating GST in India might seem daunting at first but fear not! Here’s a simplified breakdown with an everyday example to make it crystal clear.
Step 1: Know your tax rate: Goods and services fall under different GST slabs, ranging from 0% to 28%. Necessities like milk and education have 0% GST, while most goods attract 5%, 12%, or 18% GST. A few specific items like luxury cars have a higher 28% GST.
Step 2: Figure out the taxable value: This is simply the price of the good or service before adding GST. Let’s say you buy a new phone for INR 10,000.
Step 3: Apply the magic formula: Multiply the taxable value by the applicable GST rate. In our phone example, if the GST rate is 18%, the GST amount would be:
GST Amount: INR 10,000*18%= 1,800
Step 4: Add the GST amount to the taxable value: This gives you the final price you pay, including GST. So, the final price of your phone would be:
Final Price = INR 10,000 + INR 1,800 = INR 11,800
What is the difference between GST and service tax?
The GST and service tax have significant differences. GST is a broad tax which applies to the supply of goods and services, while service tax is limited to services alone. GST is a form of value-added tax, which is levied at every stage of the supply chain, while service tax is levied only on the service provider. Furthermore, the GST enables input tax credits (ITC), which were not available during the service tax regime.
Who is eligible for a GST refund?
GST refund is a process where only the registered assesses can claim an excess amount in case they have paid more tax than their GST liability. A registered taxpayer could claim the GST refund after furnishing a refund application along with all the necessary details in the GST portal.
Who is eligible for ITC?
For claiming ITC under GST, a business needs to fulfil the following criteria:
Registered Member– You need to be a bona fide member of the GST club, with a valid registration number.
Business Supplies -: Only goods and services used for your business adventures, not personal errands, are eligible for ITC claims.
Paper Perfect – Hold onto that all-important tax invoice or debit note – it’s your entry ticket to the ITC claim.
Two-Way Street – The supplier must not only charge the GST but also diligently file their return and deposit the tax with the government.
Most Important– Don’t forget to file your own GST return – it’s like showing your membership card at the ITC treasure chamber.
Remember, missing any of these keys could leave your ITC claim locked away. So, make sure you tick all the boxes and claim your rightful tax benefits!
(Republished with amendments)
