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A nation’s youth’s level of education determines how well its economy will do. Education fosters people’s comprehension, vision, creativity, and productivity, all of which contribute to GST education and overall nation’s progress. In India, the public and commercial sectors both offer educational services.

Ensuring universal access to affordable education is the top aim of the Indian government. Because they are not subject to taxes or included in the negative list, the education industry is fortunate to have numerous tax exemptions. 

Similar circumstances persisted with the introduction of the Goods and Services Tax (GST), with the industry’s tax exemptions being maintained. Of primary importance is the fact that student-provided educational services and those associated with higher education fall under the GST-exempt list.

How Has GST Made Education More Accessible?

Indian education has become more accessible because of the GST. Before GST, indirect taxes raised schooling prices due to a complex tax structure. The education sector improved after GST. GST streamlined educational services, including school and university fees, nationwide.

CategoryExemption Criteria
Charitable Trust-Run InstitutionsEducation income is exempt if the institution serves specific demographics or operates in rural areas.
Government / Local AuthoritiesExempt from GST for educational activities (e.g., government schools).
National Skill Development Corporation (NSDC)Exempt for NSDC, approved skill councils, assessment agencies, and skill development programs.
Indian Institutes of Management (IIM)Exempt for 2-year PG programs, Fellowships, and 5-year integrated programs (excluding Executive Development Program).

Table: Specific exemption criteria based on different categories

Educational institutions saved money by eliminating cascading taxes and simplifying taxes. This made education cheaper for students and their families. Under GST, books, stationery, and vocational training were excluded or taxed at lower rates, making learning materials more affordable.

GST has reduced financial obstacles and ensured a more transparent and uniform tax framework, making education more accessible to a wider population.

GST About Academic Institutions

The proposed law on GST education states that services rendered by educational institutions are exempt from the Goods and Services Tax (GST). In this context, educational institutions refer to any establishments offering services through:

  • Early childhood education and instruction through upper secondary school or a comparable program
  • Instruction as a component of a curriculum to earn a credential accepted by any currently enacted legislation; or
  • Instruction as a component of a course recognized for vocational education

Also Read: GST And The Education Sector

Govt. Extended School Fee Payment Period to Three Months for COVID-19

In light of the past experience of the COVID-19 shutdown and the global spread of the coronavirus pandemic, the Indian government has decided to extend the deadline for paying school fees and other financial commitments to three months. According to the directive, all schools and relevant institutions must adhere to this responsibility.

The updated curriculum, which includes the goods and services tax, was released by the Telangana State Board. The State Board had already announced that the GST department will incorporate the mandatory GST education course into the textbooks.

The Following Services Associated with Education Are GST-Exempt

Excursions and field trips that are part of the curriculum or are relevant to the course of study, excluding trips when lodging and meals are provided.

  • Services that educational institutions offer to their faculty, staff, and students
  • Staff, faculty, and student transportation;
  • Catering, including any government-sponsored midday meal program;
  • Services related to housekeeping, cleaning, or security are provided in these kinds of educational institutions;
  • Services connected to applying to or being tested by such an institution; up to upper secondary

The following services offered by the IIM have also been awarded the exemption:

  • Admission to the two-year, full-time, residential Post Graduate Diploma in Management programs is determined by the Common Application Process (CAT).
  • Management Fellowship Programs
  • Management studies five-year integrated programs (excluding the Executive Development Program).

In addition, the following education is GST-exempt:

  • Sector skill councils recognized by the National Skill Development Corporation
  • Recognized assessment organizations by the National Skill Development Corporation
  • The NSDC-approved national skill development programs
  • A program for developing vocational skills that have been authorized by the National Ski Certification and offers financial incentives.
  • Any program the NSDC does in conjunction with training partners:
  • Aside from the aforementioned, coaching centers’ educational programs and coaching services are not GST-exempt.

The following items are not GST-exempt:

  • Equipment supplied by other parties, such as computers, sports gear, and musical instruments
  • Activities after school that are directly provided by outside parties,
  • Food and lodging provided for the trip as previously mentioned,
  • Stationery, uniforms, and other non-academic supplies

The school will not apply GST education on the taxable supplies right away, but if the cost of obtaining those supplies is higher, the pricing of the taxable supplies may change.

Higher Education Offered by Private and Public Institutions

Under GST, private schools that offer preschool through upper secondary education are exempt. In addition to the exemption, one should consider the possibility that, with the implementation of India’s new goods and services tax, the cost of education offered by the private schools that are quickly taking over the country would increase by as much as 3 or 5 percent.

AspectPrivate Schools Offering Preschool to Upper Secondary
GST ApplicabilityExempt
Anticipated Cost IncreaseUp to 3-5%
Perceived ValuePremium payment for private education
Public Perception on ExemptionsOther instances of charity or inadequate help are considered exemptions

Table: GST for different aspects of schools

It is anticipated that institutes and universities will pay 18% of GST as they are not included in the list of exempted entities. The Indians still view private education as the best option and would pay a premium to secure it for their children; all other instances of charity or inadequate educational help are still considered exemptions.

Courses Accredited by GST at Multiple Universities

Since the goods and services tax was imposed, understanding the new indirect tax system has gotten harder, however, some universities provide specialized courses. Candidates will grasp the GST education and be able to take advantage of new GST opportunities by taking these courses.

  • ICAI Course

A special course on comprehending goods and services tax has been launched by the ICAI. The learner will be required to acknowledge all of the nuances and components of GST education by the course. After completing the GST course, participants will receive a certificate from the company, which has certified the course.

  • Dr Bhimrao Ambedkar University

The six-month course was launched by the institution the year before. Numerous applicants applied to the university for this certified GST education course, which will be taught by tax experts and senior college professors.

  • Lucknow University

Although the university had before this year offered GST-certified courses, Lucknow University increased the number of seats to 120 due to increased demand.

  • Delhi University

The curriculum’s inclusion of accredited GST education courses has previously been explored by the department. Delhi University may offer a course on GST shortly.

IIM Comes Under GST Tax Net

The Indian Institutes of Management (IIMs) Executive post-graduate programs would be subject to GST education , according to the Madhya Pradesh Authority for Advance Rulings.

The Indian Institutes of Management Act, 2017 exempts certain courses given by the IIMs from taxes; however, a recent court said that the executive programs are not entirely exempt from taxes.

The MP AAR responded to the application from IIM Indore by stating that the Executive Post-Graduate Programme in Management is unquestionably taxable under the GST. Nonetheless, there is no GST applied to the services rendered by educational institutions.

This makes it evident that, by the rule, only a select few IIM courses are exempt, while others are chargeable. Before enrollment, students ought to ascertain whether the course is subject to taxes.

Decision Over GST on School

The following pursuits will result in GST’s role in education accessibility:

  • If the institution offers coaching lessons or summer camps to pupils who are not enrolled in its programs.
  • If the school rents out its space for events like weddings and other gatherings.
  • If a physician or hospital sells other, unneeded equipment for more than Rs. 20 lakhs.

Additionally, it is announced that the funds used for the workplace canteen would not qualify for In-kind tax credits. Additionally, the business will not receive a GST refund for expenses related to buildings and cars. In addition, an e-way bill will be sent if the shipment is made by airplane.

Course on GST Accounts Assistant Offered by NSDC and BFSI

National Skill Development Corporation (NSDC) and BFSI (Banking, Financial Services, and Insurance) introduced a GST Accounts Assistant course to promote a better understanding of goods and services tax in the market and among professionals.

  • The authorized department of the Indian government has created this course intending to help participants understand the goods and services tax regime’s many procedures as soon as possible.
  • Under the direction of the National Academy of Customs, Indirect Taxes and Narcotics (NACIN), the aforementioned “GST Accounts Assistant course” has been developed in collaboration with NSDC, which will also offer 20 lectures in an offline and online format.
  • Individuals who possess a foundational understanding of accounting from their 10+2 education can hone their professional skills and expand their knowledge in the subject of GST role in education accessibility by enrolling in this course.

Conclusion

Making education more accessible in India has been greatly aided by the introduction of the Goods and Services Tax (GST) in the education sector. The government’s broad tax exemptions for educational services demonstrate its commitment to delivering affordable education.

The latest developments—like the exemption of NTA exams from GST and successful court rulings—further demonstrate the ongoing attempts to simplify education taxation.

Also Read: Know Everything About GST Billing Software

FAQs

  • What Is “Education” Under The CGST Act, And How Does It Boost Economic Growth?

CGST Act doesn’t define “education,” but the Apex Court says it involves preparing pupils for lifetime learning and character development through regular schooling, which is vital to a nation’s economic success.

  • How Does GST Support The Government’s Education Priority?

Universal, affordable education is the government’s foremost priority. GST provides broad tax exemptions to the education industry, making it more accessible. In all, it is entirely safe to say that GST supports the net government’s education priority. 

  • Are Educational Services Subject To The Gst-Exempt List Or Not?

Educational services are GST-free. Educational services, including pre-school and higher secondary, are GST-exempt. Educational services from pre-school to higher secondary are GST-exempt. This GST-free status decreases student debt and increases education access by eliminating indirect taxes on educational services.

  • How have Recent legislation and rulings affected educational service taxation?

Recent decisions, such as exempting NTA exams from GST and favoring other instances, demonstrate education taxation reform for the betterment of the people.. GST’s role in education accessibility to university services remains a problem.

  • How Does GST Affect Entrance Tests, And What Changes Have Occurred?

The recent removal of the 18% GST on exam costs for NTA exams is a significant change. This action helps lower exam-takers financial obstacles, lowers the cost of educational exams, and supports initiatives to improve accessibility in the classroom.

  • What Are The Recent State Taxation Of Educational Institutions?

The Rajasthan AAR’s ruling regarding Kota University’s affiliation is an example of how different state taxes are applied to educational institutions. This decision highlights how complicated it is to tax educational institutions.

  • How Does GST Affect Private Preschool-To-Higher Secondary Schools, And What Are Their Expectations?

Currently, private education from preschool through high school is GST-exempt. However, private schools may see a 3-5% increase in costs as a result of the new GST policy. 

  • Why are competitive exam candidates concerned about GST’s impact on coaching institutes?

The 18% tax on coaching institutes worries students studying for government examinations, IITs, and banking courses. Students already struggling with exam preparations may struggle to afford essential educational assistance services due to this tax load.

  • What Are Universities And Institutions Doing About GST?

ICAI, Dr. Bhimrao Ambedkar University, and Delhi University offer authorized GST courses to help people grasp the new regime. These courses help professionals and students understand Goods and Services and others

  • How Does GST Affect School Canteen Food And Drinks?

Upper secondary schools offer GST-exempt meals and drinks. The exemption does not provide input tax credit, and school canteen supplies are subject to 5% GST. This tax structure takes into account educational institution food and beverage services.

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Moulik Jain
I am a seasoned marketer specializing in Tax, Finance, and MSMEs. I bring a wealth of hands-on experience to demystify complex subjects, providing insightful guidance for entrepreneurs and finance enthusiasts alike.

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