GST on Education in India: Rates, Exemptions, and Court Orders

The Goods and Services Tax (GST) on education-related services in India is a topic of significant interest for educational institutions, students, and parents. This blog post will explore the GST rates, HSN codes, and specific scenarios related to education services, including private school fees and exemptions for educational institutions.

GST Rates and HSN Codes for Education Services

The GST rates for education services are categorized under the HSN code 9992. Here are the key details:

• Pre-Primary Education Services (HSN 999210): GST rate is 0%.
• Primary Education Services (HSN 999220): GST rate is 0%.
• Secondary Education Services, General (HSN 999231): GST rate is 0%.
• Secondary Education Services, Technical and Vocational (HSN 999232): GST rate is 0%.
• Higher Education Services, General (HSN 999241): GST rate is 0%.
• Higher Education Services, Technical (HSN 999242): GST rate is 0%.
• Higher Education Services, Vocational (HSN 999243): GST rate is 0%.
• Specialised Education Services (HSN 999259): GST rate is 18%.
• Cultural Education Services (HSN 999291): GST rate is 18%.
• Sports and Recreation Education Services (HSN 999292): GST rate is 18%.
• Commercial Training and Coaching Services (HSN 999293): GST rate is 18%.
• Other Education and Training Services (HSN 999294): GST rate is 18%.
• Services Involving Conduct of Examination for Admission to Educational Institutions (HSN 999295): GST rate is 0%.
• Other Educational Support Services (HSN 999299): GST rate is 18%.

GST on Education in India

Education services in India are largely exempt from GST to ensure affordability and accessibility. The GST exemption applies to services provided by educational institutions from pre-school to higher secondary level, as well as those offering degree or diploma courses recognized by law.

GST on Education Fees

Educational institutions providing services up to higher secondary level are exempt from GST on fees. This exemption helps in keeping education affordable for students and parents.

GST Exemption for Educational Institutions Notification

The GST exemption for educational institutions is notified under Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017. This notification outlines the specific services that are exempt from GST, including transportation of students, catering, and housekeeping services provided within the premises of educational institutions.

GST on Education in India Before 2014

Before the implementation of GST in 2017, education services were subject to various indirect taxes such as service tax, VAT, and others. The introduction of GST streamlined the tax structure, providing clarity and uniformity in the taxation of education services.

GST on Private School Fees

Private schools providing education up to higher secondary level are exempt from GST on their fees. However, additional services such as coaching or training provided by private institutions may attract GST at the rate of 18%.

GST Exemption for Educational Institutions

Educational institutions providing recognized degree or diploma courses are exempt from GST. This exemption ensures that the cost of higher education remains manageable for students pursuing professional and academic qualifications.

GST on Education Courses

Courses offered by educational institutions that lead to a qualification recognized by law are exempt from GST. However, specialized courses, coaching, and training services provided by private institutions may attract GST at the rate of 18%.

Recent GST Notifications and Circulars on Education

Here are some recent GST notifications and circulars issued by the Ministry of Finance related to GST on education:

1. Circular No. 237/31/2024-GST: Issued on October 15, 2024, this circular clarifies issues regarding the implementation of provisions of sub-section (5) and sub-section (6) in section 16 of the CGST Act, 2017. It addresses the time limit to avail input tax credit under certain specified cases.
2. Circular No. 238/32/2024-GST: Also issued on October 15, 2024, this circular provides clarification on various doubts related to Section 128A of the CGST Act, 2017. It includes guidelines for the waiver of interest or penalty or both, relating to demands under section 73 of the CGST Act for specific financial years.
3. Circular No. 206/18/2023-GST: Issued on October 7, 2023, this circular provides clarifications regarding the applicability of GST on certain services based on the recommendations of the GST Council in its 52nd meeting.

FAQ Section: GST on Education-Related Services

1. What is the GST rate on education services in India?

The GST rate on education services varies. Basic educational services provided by pre-schools, schools, and certain higher education institutions are generally exempt from GST. However, specialized education services, coaching, and training services provided by private institutions may attract a GST rate of 18%.

2. Are private school fees subject to GST?

Private schools providing education up to higher secondary level are exempt from GST on their fees. However, additional services such as coaching or training provided by private institutions may attract GST at the rate of 18%.

3. What are the HSN codes for education services?

The HSN code for education services is 9992. This code covers various education services, including pre-primary, primary, secondary, higher education, and specialized education services.

4. Is there a GST exemption for educational institutions?

Yes, educational institutions providing recognized degree or diploma courses are exempt from GST. This exemption ensures that the cost of higher education remains manageable for students pursuing professional and academic qualifications.

5. Are there any Court orders related to GST on education?

Yes, there have been several court orders related to GST on education. Here are a couple of notable cases:

1. M/S Educational Initiatives Pvt. Ltd vs Union of India (2022): This case was heard by the Gujarat High Court. The petitioner, an educational service provider, sought exemption from GST for services related to the ASSET examination provided to schools. The court ruled in favor of the petitioner, stating that such services are exempt under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017.
2. Private Schools vs State Government (2024): Private schools affiliated with the Punjab State Education Board moved the Punjab and Haryana High Court against the imposition of 18% GST on affiliation fees. The schools argued that this additional tax burden would ultimately affect parents, especially those from economically weaker sections. The court granted a stay on the imposition of GST on affiliation fees.

These cases highlight the ongoing legal discussions and clarifications regarding the applicability of GST on various educational services.

In conclusion, the GST on education-related services in India is designed to support the accessibility and affordability of education. Understanding the applicable GST rates and exemptions can help educational institutions, students, and parents navigate the tax landscape more effectively.

Useful internal links

1. GST Rates for Services with HSN Code: This page provides detailed information on GST rates for various services categorized by HSN codes.
2. Freight Charges HSN Code 9965: Everything you need to know about GST rates for freight services, including road, rail, water, air, and pipeline transport.
3. HSN Code 08: GST Classification for Edible Vegetables and Roots: Detailed information on GST rates for edible vegetables and roots.