Taxability of Educational Services
Taxable supply means the supply of goods or services that is subject to tax under GST. The following services provided by an educational institution to its faculty, staff, and students are not taxed under GST -
- Transportation of students, faculty, and staff.
- Catering and mid-day meals scheme sponsored by the Central Government, State government or Union Territory. It also includes security, housekeeping, and cleaning services provided by the educational institutions.
- Services relating to admission to conduct of examination by such institutions upto higher secondary.
While the services provided by an educational institution are not liable to GST, services provided to an educational institution are subject to GST.
Services provided by private tutorials, tuitions, and coaching centers are not covered under approved vocational education services and, thus, are taxable at 18% GST.
GST Exemptions Available to Educational Institutions
Income from education is fully exempt from GST if a charitable trust operates a school, college, or educational institution for:
- Abandoned, orphaned, or homeless children
- Physically or mentally abused individuals
- Prisoners
- Persons aged 65 or above residing in rural areas
Exemptions for Government Educational Institutions:
Education provided by a government, local authority, or governmental authority (e.g., government/municipal schools) is not considered a supply of services and is exempt from GST.
Other Education-Related GST Exemptions:
- National Skill Development Corporation (NSDC) and its approved sector skill councils, assessment agencies, and training programs
- Vocational skill development programs under the National Skill Certification and Monetary Reward Scheme
- Any NSDC-implemented scheme with training partners
IIM Program Exemptions:
- Two-year full-time residential Post Graduate Diploma in Management (PGDM) programs (admission via CAT)
- Fellowship programs in Management
- Five-year integrated management programs (excluding Executive Development Programs)
GST Rates on Educational Services
GST Rates on educational services in India can range from 5% to 28%. The rates vary significantly depending on the type of service provided.
GST Rate on School Education
GST on school education is generally exempt for most institutions, including government-run schools, schools managed by local authorities, and non-profit organizations, as education is considered a public service.
However, private schools operated by for-profit organizations may be subject to an 18% GST on tuition fees and other educational services. These schools can also claim Input Tax Credit (ITC) to offset the GST paid on their inputs.
GST Rate on Higher Education
Higher education services in India are generally taxed at 18% GST, which applies to colleges, universities, and professional courses.
Exemptions:
- Non-Profit Institutions: Educational institutions run by the government, local bodies, or trusts are usually exempt.
- Recognized Courses: Programs leading to degrees or diplomas recognized by government bodies like UGC or AICTE may be exempt.
- Vocational Courses: Certain government-approved vocational courses are also exempt.
The exemption depends on specific criteria. Private institutions, coaching centers, and professional courses are generally subject to an 18% GST rate.
GST Rate on Vocational Training and Coaching
Vocational training, coaching classes, and private tutorials, including coaching for exams like JEE, NEET, UPSC, and other professional courses, are generally subject to an 18% GST rate. Below are the exemptions
- Government-Approved Vocational Courses: Skill development programs approved by the National Skill Development Corporation (NSDC) may be exempt from GST.
- Special Categories: Certain vocational courses aligned with national priorities or social welfare objectives may also qualify for exemptions.
GST Rate on Distance Education
Distance education services are generally taxed at 18% GST. Given below are the GST exemptions on distance education -
- Government-Recognized Institutions: Distance education programs offered by UGC- or AICTE-recognized universities and colleges may be exempt. For example, IGNOU’s distance MBA programs typically fall under this exemption.
- Vocational Courses: Certain government-approved vocational programs may also be exempt from GST.
GST Rate on Online Courses and Training
Online courses and training programs are generally subject to an 18% GST rate, given their rising popularity. Given below are some of its exemptions -
- Government-Run Platforms: Online courses offered by government-run platforms may be exempt, similar to traditional education services.
- Private Online Education Providers: Most private platforms and coaching institutes are subject to 18% GST.
GST Rate on Education Materials
Educational institutions often provide materials along with their services, and GST rates vary based on the type of material:
- Essential textbooks and stationery (notebooks, pens, pencils, erasers) – 5% to 12% GST
- Non-essential items (school uniforms, bags, certain stationery) – 18% GST
- Printed materials (question papers, answer sheets, study materials) – 12% to 18% GST
The exact GST rate depends on the item's classification and HSN code.
GST Rate on Ancillary Services Provided to Educational Institutions
While core educational services are generally exempt or taxed at concessional rates, ancillary services provided by schools, colleges, and universities are subject to GST at different rates:
- Transportation Services (for students and staff) – 5% GST (with Input Tax Credit available)
- Catering Services (including mid-day meals) – 18% GST
- Rental Services (income from leasing classrooms, hostels, or administrative buildings) – 18% GST
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