GST

ON EDUCATIONAL SERVICES

CA Yashwant Kasar
B.Com, FCA, CISA, DISA, PMP, FAIA
Email: yashwant@ykc.co.in Cell: +91 98224 88777

JUNE 2018

EDUCATIONAL SERVICES

The commercial education is subject to GST @ 18% (CGST 9% and SGST 9%) or IGST 18%.

Various exemptions are contained in Notification No. 12/2017-CT (Rates) and 9/2017-IT (Rates) both
dated 28-6-2017, effective from 1-7-2017.

Services provided by educational institution to its students, faculty and staff exempt:
Service supplied by an educational institution to its students, faculty and staff is exempt from GST -
Sr. No. 66(a) of Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017.

Services provided by educational institution to conduct entrance examinations exempt w.e.f.
25-1-2018:
Service supplied by an educational institution by way of conduct of entrance examination against
consideration in the form of entrance fee; is exempt from GST w.e.f. 25-1-2018 - Sr. No. 66(aa) of
Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017 inserted w.e.f.
25-1-2018.

Services supplied to educational institution upto HSC level exempt:
Following services supplied to recognised educational institution from pre-school and higher
secondary school are exempt (but not in respect of graduation or post graduation courses) –
(i) transportation of students, faculty and staff
GST on Educational Services CA Yashwant Kasar

(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
- Sr. No. 66(b) clauses (i), (ii) and (iii) of Notification No. 12/2017-CT (Rate) and No. 9/2017-
IT (Rate) both dated 28-6-2017.

Services supplied to educational institution of conduct of examination:
Following service supplied to recognised educational institution are exempt –
services relating to admission to, or conduct of examination by, such institution * - Sr. No. 66(b)(iv)
of Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017.
[* - The words 'upto higher secondary' in clause (iv) above have been omitted w.e.f. 25-1-2018. Thus,
w.e.f. 25-1-2018, all services supplied to recognized educational institution relating to admission to
or conduct of examination by such recognized educational institution will be exempt].

Services supplied to educational institution of supply of online journals above HSC exempt
w.e.f. 25-1-2018:
Following service supplied to recognised educational institution is exempt –
supply of online educational journals or periodicals - Sr. No. 66(b)(v) of Notification No. 12/2017-CT
(Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017 inserted w.e.f. 25-1-2018
This exemption shall not 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 - second proviso to Sr. No. 66
inserted w.e.f. 25-1-2018.
The wording of the second proviso seems to be faulty. Really, the intention seems to be to grant
exemption upto HSC and for vocational courses. [If no amendment is issued, then the exemption is
only for service above HSC].

Service of hire of motor vehicle for transportation of students, faculty and staff upto HSC level is
exempt w.e.f. 25-1-2018:
Service by way of giving on hire motor vehicle for transport of students, faculty and staff, to a person
providing services of transportation of students, faculty and staff to an educational institution
providing services by way of pre-school education and education upto higher secondary school or
equivalent are exempt w.e.f. 25-1-2018
- Sr. No. 22(c) of Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017
inserted w.e.f. 25-1-2018.


Canteen services provided in recognized educational institution:
If canteen service is supplied in college by the educational institute itself, there is no tax liability.
However, if the service is supplied through contractor, tax @ 5% [CGST 2.5% plus SGST/UTGST 2.5%]
is payable - CBE&C circular No. 28/02/2018-GST dated 8-1-2018.

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GST on Educational Services CA Yashwant Kasar

No GST on hostel accommodation provided by educational institution:

Hostel accommodation is part of service provided by educational institution to students. On such
charges GST is not payable even if amount is recovered on yearly basis - PIB press release dated 13-
7-2017 16:01 IST and CBE&C press release No. 77/2017 dated 13-7-2017.

Training in recreational activities:
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 are exempt.


Definitions relevant in respect of education services:
Educational Institution:
"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 - para 2 of Notification No.
12/2017-CT (Rate) and No. 9/2017-IT (Rate) both dated 28-6-2017, effective from 1-7-2017.

"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 or
(ii) (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 - para 2 of Notification No. 12/2017-CT (Rate) and No.
9/2017-IT (Rate) both dated 28-6-2017, effective from 1-7-2017.


Composite and Mixed Supply in so far as Education Services are concerned:

Boarding schools provide service of education coupled with other services like providing dwelling
units for residence and food. This may be a case of bundled services if the charges for education and
lodging and boarding are inseparable. Their taxability will be determined in terms of the principles laid
down in section 2(30) read with section 8 of the CGST Act, 2017. Such services in the case of boarding
schools are naturally bundled and supplied in the ordinary course of business. Therefore, the bundle
of services will be treated as consisting entirely of the principal supply, which means the service which
forms the predominant element of such a bundle. In this case since the predominant nature is
determined by the service of education, the other service of providing residential dwelling will not be

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GST on Educational Services CA Yashwant Kasar

considered for the purpose of determining the tax liability and in this case the entire consideration for
the supply will be exempt.

Services supplied by IIM:
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.

Services supplied by National Skill Development Corporation (NSDC):
Services provided by –
(a) the National Skill Development Corporation set up by the Government of India
(b)a Sector Skill Council approved by the National Skill Development Corporation
(c) an assessment agency approved by the Sector Skill Council or the National Skill Development
Corporation
(d) a training partner approved by the National Skill Development Corporation or the Sector Skill
Council, in relation to following are exempt:
(i) the National Skill Development Programme implemented by the National Skill Development
Corporation; or (ii) a vocational skill development course under the National Skill
Certification and Monetary Reward Scheme; or (iii) any other Scheme implemented by the
National Skill Development - Notification No. 12/2017-CT (Rate) and No. 9/2017-IT (Rate)
both dated 28-6-2017, effective from 1-7-2017.

Services of assessment bodies under NSDC:
Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of
Skill Development and Entrepreneurship by way of assessments under the Skill Development
Initiative Scheme are exempt.

Services under Deen Dayal Upadhyaya Yojana:
Services provided by training providers(Project implementation agencies) under Deen Dayal
Upadhyaya Grameen Kaushalya Yojana implemented by the Ministry of Rural Development,
Government of India by way of offering skill or vocational training courses certified by the National
Council for Vocational Training are exempt.

Training programmes where expenditure borne by Central Government:
Services provided to the Central Government, State Government, Union territory administration
under any training programme for which total expenditure is borne by the Central Government,
State Government, Union territory administration are exempt.

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GST on Educational Services CA Yashwant Kasar

Conclusion:

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. In a nutshell, every attempt is made to ensure that the core educational services are fully
exempt from GST.