{"id":15719,"date":"2020-09-02T14:35:37","date_gmt":"2020-09-02T09:05:37","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=15719"},"modified":"2020-09-02T14:35:38","modified_gmt":"2020-09-02T09:05:38","slug":"impact-of-gst-on-educational-institutions-and-exemptions","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/","title":{"rendered":"Impact Of GST On Educational Institutions And Exemptions"},"content":{"rendered":"\n<p class=\"has-drop-cap\">The Good and Service\nTax (GST) is an indirect tax which has replaced the various indirect taxes\nwhich were being levied upon the citizens. The GST Law was approved in the\nparliament on 29<sup>th<\/sup> March, 2017 and came into effect on 1<sup>st<\/sup>\nJuly, 2017. There are three taxes applicable under this system- IGST, CGST,\nSGST, UTGST. Let&#8217;s try to understand the meaning of&nbsp; GST impact on educational institutions.<\/p>\n\n\n\n<p>Education has not been well-defined under the CGST Act but according to the Supreme Court of India in the case of \u201c<strong><em>Loka Shikshana Trust Vs. CIT\u201d,<\/em><\/strong> education has been explained as the process of receiving formal training and developing various skills, knowledge and the character of the students by normal schools. Education is a major sector in the Indian economy and is widely provided by both private as well as the public sector. Education is primarily viewed as a social service and not as a business and thus receives various tax exemptions from the government of India.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/multiple-registration-under-gst\/\">Multiple Registration Under GST<\/a><\/mark><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/#GST_on_Educational_Institution_on_Educational_Services\" >GST on Educational Institution on Educational Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/#Place_of_Supply_for_Educational_Services\" >Place of Supply for Educational Services<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/#Registration_of_GST_on_Educational_Institutions\" >Registration of GST on Educational Institutions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/#Exemptions_on_Education_Services_under_GST_on_Educational_Institutions\" >Exemptions on Education Services under GST on Educational\nInstitutions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/impact-of-gst-on-educational-institutions-and-exemptions\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"GST_on_Educational_Institution_on_Educational_Services\"><\/span>GST on Educational Institution on Educational Services<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>According to GST on educational institution on educational services, means the one providing the following services:-<\/em><\/strong><\/p>\n\n\n\n<ul><li>Pre-school\neducational institution and educational institution upto higher secondary or\nequivalent;<\/li><li>Educational\ninstitute providing education that is a part of a curriculum for receiving a\nqualification that is recognised by any legal provisions for the time being in\nforce;<\/li><li>Education\nthat is a part of an approved vocational course.<\/li><\/ul>\n\n\n\n<p>The core educational\nservices under the GST Regime have been exempted vides notification no.\n12\/2017-CT(R). Education Services are explained in heading number 9992 and then\nagain classified as:-<\/p>\n\n\n\n<ul><li>Primary\neducation<\/li><li>Pre-primary\neducation<\/li><li>Secondary\neducation<\/li><li>Higher\neducation<\/li><li>Specialized\neducation<\/li><li>Other\neducation services.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Place_of_Supply_for_Educational_Services\"><\/span>Place of Supply for Educational Services<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>GST must be collected\nand returned by the person who is supplying the services. While levying GST,\nthe person who is supplying the services must differentiate between inter-state\nand intra-state supply to levy IGST or CGST and SGST. For GST on educational institutions,\nthe place of supply can be figured out as follows:<\/p>\n\n\n\n<ul><li>The\nplace of supply of the goods and services would be the location of the person,\nin case the person to whom the supply is being made is a registered person.<\/li><li>The\nplace of supply would be the place where event is held if the person to whom\nthe goods and services are being supplied is a person other than a registered\nperson.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Applicability of GST on Educational Institutions in\nDifferent Scenarios in Education Sector<\/h3>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"625\" height=\"415\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-6.png\" alt=\"GST on Educational Institutions in Different Scenarios in Education Sector\" class=\"wp-image-15720\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-6.png 625w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/09\/image-6-300x199.png 300w\" sizes=\"(max-width: 625px) 100vw, 625px\" \/><\/figure><\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Registration_of_GST_on_Educational_Institutions\"><\/span>Registration of GST on Educational Institutions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The fees charged by\nan educational institute would attract zero GST rates if the said institute is\nproviding only education. If this is the case then that educational institute\nneed not be registered.<\/p>\n\n\n\n<p>GST on Educational Institutions is liable to be registered if that particular institute is providing not only <strong><em>education<\/em><\/strong><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Education\"><strong><em>[1]<\/em><\/strong><\/a><\/sup> but also other services such as books and uniforms for the students of that institute.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Exemptions_on_Education_Services_under_GST_on_Educational_Institutions\"><\/span>Exemptions on Education Services under GST on Educational\nInstitutions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong><em>Services provided under GST on educational institutions to students, faculty and staff-<\/em><\/strong><\/p>\n\n\n\n<ul><li>The education that is provided from pre-school to higher secondary schools by private schools is exempted under GST.<\/li><li>Transportation services being provided to faculty, students and staff;<\/li><li>Catering services being provided by the schools which also include any schemes introduced by the government;<\/li><li>Security, sanitation or house-keeping services which are conducted in the education centre;<\/li><li>Admission and examination services;<\/li><li>Entrance exam fees are exempted from the GST.<\/li><li>If a charitable trust is running an education centre for the following groups then it is wholly exempted from GST:<\/li><\/ul>\n\n\n\n<ol><li>Abandoned, orphaned and homeless children;<\/li><li>Physically or mentally abused person, prisoners;<\/li><li>Persons above the age limit of 65 years;<\/li><li>All of the above residing in a rural area.<\/li><\/ol>\n\n\n\n<ul><li>Any government authority providing education does not have GST levied on it as it does not come under the prospect of supply of services.<\/li><li>Any foods or drinks that are supplied to the students by the school itself do not come under GST and are exempted from the same.<\/li><\/ul>\n\n\n\n<ul><li>National Skill Development Corporation that are:<\/li><\/ul>\n\n\n\n<ol><li>Set up by the govt of India.<\/li><li>Have approved assessment agencies,<\/li><li>\u00a0Approved by the NSDC<\/li><\/ol>\n\n\n\n<ul><li>Curriculum or course materials provided to students.<\/li><li>Exam fees.<\/li><li>Administrative services such as registration, issuing academic receipt, late fees payments and various other such services<\/li><li>Field trips organized by the institutions which are required under the course of study except for the food and accommodation services provided on such trios.<\/li><li>Certain services provided by the IIM are also exempted under the GST Regime.<\/li><\/ul>\n\n\n\n<p>The Government of India( GOI)\u00a0 has a constitutional responsibility to provide free and compulsory elementary education to all the citizens of this country. Thus, in order to promote education and emphasize on its importance, the educational sector has been exempted from taxation. However, the commercialization of education policy is also a reality and cannot be ignored. The need to differentiate between core and ancillary education is immense as the line is blurring and education has now become an organized industry with high revenues. The GST law tries to maintain balances whereby core educational provided and received by the educational institutes are exempted and the rest are taxed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The importance of education in India cannot be undermined due to the mainstream of the population below 25 years of age. Due to the large population as well as poverty, Education should effortlessly be available at less cost. Implementation of GST on Educational Institutions has led to rise in the cost of higher education and Distance Education. When schools were considered and exempted from <a href=\"https:\/\/corpbiz.io\/gst-registration\"><strong>GST Registration<\/strong><\/a>, the government had to give the same consideration, which would have avoided in such situation.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/taxation-of-educational-institutions-under-gst\/\">Know about the Taxation of Educational Institutions under GST<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Good and Service Tax (GST) is an indirect tax which has replaced the various indirect taxes which were being levied upon the citizens. The GST Law was approved in the parliament on 29th March, 2017 and came into effect on 1st July, 2017. There are three taxes applicable under this system- IGST, CGST, SGST, [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":15734,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[952],"acf":{"service_id":"132"},"authorName":"Sakshi Srivastava","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/03\/IMG-20180130-WA0007.jpg","authorDescription":"Sakshi has pursued B.B.A.LL.B.(IPR Hons.). She is an avid reader and is keen to gather and share her knowledge on the subjects relating to IPR, Company Law and GST. Priorly she has worked as a legal researcher and vide her articles she aims at improving the core knowledge of the subjects to the masses.","postViews":8663,"readingTime":4,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15719"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=15719"}],"version-history":[{"count":10,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15719\/revisions"}],"predecessor-version":[{"id":15738,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/15719\/revisions\/15738"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/15734"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=15719"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=15719"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=15719"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}