GST Insights for Education:
Pre-GST Laws for Educational Institutions:
- Before GST, services provided by educational institutions to students, faculty, or staff were exempt from service tax under Mega Exemption Notification Number ST-25/2012 dated 20th June 2012.
- From 1st April 2014, certain services provided to educational institutions were exempted, including transportation, catering, security, cleaning, housekeeping, and services related to admission or conduct of examinations. However, other services were taxable.
Definition of Educational Institution under GST:
- Under GST, an “educational institution” includes institutions providing pre-school education, education up to higher secondary school or equivalent, education for obtaining a recognized qualification, and approved vocational education courses.
Taxability of Educational Services under GST:
- Certain services provided by educational institutions to students, faculty, or staff are exempt from GST, including transportation, catering, security, cleaning, and housekeeping services.
- However, services provided to educational institutions other than those offering pre-school education up to higher secondary are taxable.
- Coaching centers, tuitions, and private tutorials are taxable at 18% GST rate as they do not fall under approved vocational education courses.
Exemptions Available to Educational Institutions:
- Charitable trusts running schools or colleges for specific groups are wholly exempt from GST.
- Government or local authority-run educational activities are also exempt.
- Certain programs and services approved by national skill development corporations or IIMs are exempt.
Registration Requirements for Educational Institutions:
- Educational institutions providing only education services are not required to register for GST.
- Institutions providing additional supplies or services, such as books or uniforms, are liable to register.
GST Applicability on Higher Educational Institutions:
- Services provided to higher educational institutions are taxable, including transportation, catering, housekeeping, and admission-related services.
GST Applicability on Training Programs and Other Events:
- Commercial activities such as training programs, camps, and yoga events are liable for GST.
Taxability of Books and Stationery:
- Supply of books is exempt from GST, but uniforms, stationery, and non-academic supplies are taxable.
GST on Private Coaching Centers and Distance Education:
- Private coaching centers and distance education programs are taxable at 18% GST rate.
Filing of GST Returns:
- Private tutors and coaching centers must file GST returns like any other taxpayer, either monthly or quarterly, depending on turnover.
Impact of GST on Education:
- The implementation of GST has led to a rise in the cost of higher education and distance education, impacting accessibility and affordability.
Understanding these aspects of GST taxation on educational institutions is crucial for compliance and financial planning within the education sector.
