Effect of GST on education sector in India

GST has affected almost all things in India and even education sector is not far from GST effects. That is why there is impact of GST on education sector. This also becomes reason for you to know about GST rates in education sector. Further GST affects even Education and Training Industry. In this article you know exactly what services are under GST and what are not under GST tax tag.

Impact of GST on education sector

GST affected education and training sectors. And this is another reason for change in changing fees for coaching classes. On other hand there is change in tax rates on books. To help you further you can check below tax rates.

Goods and Services Tax rates in education sector

  • Colour book for children – 0 %
  • School bag – 12 %
  • Fountain pen, nib, refill – 18 %
  • Exercise book, Stapler, ball pen, sharpener and pencil – 12 %

Also know about other GST HSN codes for various things.

List of educational services that are exempt from GST

When following educational institutions provide educational services then they are exempt from GST tax rates –

  • By educational institution to students, staff or faculty
  • Mid day meals
  • Transportation of students, staff and faculty
  • Security, cleaning, examination or admission related services
  • Services that Indian Institute of Management provides (but it has to be according to Central Government guidelines)
  • National Skill Development Corporation
  • Sector Skill Council
  • If National Skill Development Corporation or Sector Skill Services approves any training partner or even assessment agency

Change in coaching fees under new GST taxes

According to new GST tax rates there is also change in GST on coaching fees. It is so because earlier there was 15 % Service Tax on all coaching classes. Even non conventional courses were part of it. However because of GST implementation all these courses come under 18 % tax rate.

Further there is change in hostel fees as well. While it affects only eating and drinking services in hostels. So it is good for you if you check every bill carefully before paying the bill. On other hand there are some educational services which do not come under new Goods and Services Taxes.

Another aspect is that there will no tax on services that educational institutions provide. While these are from pre schools to higher secondary level. As you read in starting of article that Goods and Services Tax rates are very less even on stationery. Besides tuition fees and text books are not highly priced.

Limitations on exemption of taxes

Apart from above things there are some exemptions on things. It means that there will be restrictions on exemption on some transactions or activities that Central or State Government carries out. This rule applies to even Local Authorities.

There are some more services which are not exempted under GST. Below you can check this list of services.

Services not exempt from GST

  • Food, accommodation during excursion
  • Supplies or services that third parties provide such as computers, academic instruments, sports equipment etc
  • Any other activity that third party offers after school hours and
  • Supplies of non academic things like that of stationery, uniforms or bags

On other hand you can know about GST registration application process. This guide will simplify your work on registration under Goods and Services Taxes as now you also have idea about effect of GST on education sector in India.

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