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  GST  (GOODS AND SERVICES TAX) GST on Education Services “Education” is not dened in the CGST Act but as per Apex Court decision in “Loka Shikshana Trust v/s CIT”, education is process of training and developing knowledge, skill and character of students by normal schooling. Taxing the Education Sector has always been a sensitive issue, as education is seen more as a social activity than a business one. The government has a constitutional obligation to provide free and compulsory elementary education to every child. Thus, to promote education, it would be benecial if educational services are exempted from tax. However, commercialisation of education is also a reality. The distinction between core and ancillary education is blurring and education is now an organised industry with huge revenues. The GST Act tries to maintain a ne balancewhereby core educational services provided and received by educational institutions are exempt and other services are sought to be taxed at the standard rate of 18%. Classication of Education Services: Education Services are classied in heading 9992 (as per Notication No. 11/2017-Central Tax (Rate)) and are further sub-divided into six groups (as per the Annexure to the same notication) comprising of Pre-primary, primary, secondary, higher, specialised and other educational & support services as below: Directorate General of Taxpayer Services CENTRAL BOARD OF EXCISE & CUSTOMSwww.cbec.gov.in Heading and GroupService Code (Tari)Service Description Heading no. 9992Education servicesGroup 99921   Pre-primary education services   999210Pre-primary education servicesGroup 99922   Primary education services   999220Primary education servicesGroup 99923   Secondary Education Services   999231Secondary education services, general   999232Secondary education services, technical and vocational Heading and GroupService Code (Tari)Service Description Group 99924   Higher education services   999241Higher education services, general   999242Higher education services, technical   999243Higher education services, vocational   999249Other higher education servicesGroup 99925   Specialised education services   999259Specialised education services Group 99929   Other education & training services and educational support services   999291Cultural education services   999292Sports and recreation education services   999293Commercial training and coaching services   999294Other education and training services n.e.c.   999295services involving conduct of examination for admission to educational institutions   999299Other Educational support services  @CBEC_India@askGST_GoIcbecindia Follow us on: Rate of GST The rates of GST on education services (as per Notication No. 11/2017-Central Tax (Rate), Notication No. 11/2017-Central Tax (Rate) and Notication No. 12/2017-Central Tax (Rate) all dated 28.06.2017 as amended) are as below: Chapter/ Section/ HeadingDescription of ServiceRate / Notication 9992Education Services 18% ( 9% Central Tax + 9% State Tax)/ Serial No. 30 of Notication No. 11/2017-Central Tax (Rate) dated 28th June, 20179992Services provided – (a) by an educational institution to its students, faculty and sta; (b) to an educational institution, by way of, -(i) transportation of students, faculty and sta; (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; (iv) services relating to admission to, or conduct of examination by, such institution; up to higher secondary: Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalentNIL / Serial No. 66 of Notication No. 12/2017- Central Tax (Rate) dated 28th June, 2017 Prepared by: National Academy of Customs, Indirect Taxes & Narcotics GST  (GOODS AND SERVICES TAX) GST on Education Services Chapter/ Section/ HeadingDescription of ServiceRate / Notication 9992Services 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) ve year integrated programme in Management.NIL / Serial No. 67 of Notication No. 12/2017- Central Tax (Rate) dated 28th June, 201790 or any chapter Technical aids for education, rehabilitation, vocational training and employment of the blind such as Braille typewriters, braille watches, teaching and learning aids, games and other instruments and vocational aids specically adapted for use of the blindBraille instruments, paper etc.5%/ Serial No. 257 of Schedule I of the Notication No.1/2017-Central Tax (Rate) dated 28th June, 20179023Instruments, apparatus and models, designed for demonstrationalpurposes (for example, in education or exhibitions), unsuitable for other  uses 28 %/ Serial No. 191 of Schedule IV of the Notication No.1/2017-Central Tax (Rate) dated 28th June, 2017  @CBEC_India@askGST_GoIcbecindia Follow us on: Thus, services provided by an educational institution to students, faculty and sta are exempt. 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 qualication recognised by any law for the time being in force; (iii) Education as a part of an approved vocational education course.Within the term “educational institution”, sub-clause (ii) covers institutions providing services by way of education as a part of curriculum for obtaining a qualication recognised by any law for the time being in force. This is an area where doubts have persisted as to what would be the meaning of “education as part of curriculum for obtaining qualication recognised by law”. GST on services being a legacy carried forward from the Service Tax regime, the explanation given in the Education guide of 2012 can be gainfully referred to understand the meaning of the term which reads as under; What is the meaning of ‘education as a part of curriculum for obtaining a qualication recognized by law’? It means that only such educational services are in the negative list as are related to delivery of education as ‘a part’ of the curriculum that has been prescribed for obtaining a qualication prescribed by law. It is important to understand that to be in the negative list the service should be delivered as part of curriculum. Conduct of degree courses by colleges, universities or institutions which lead grant of qualications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualication.  Are services provided by way of education as a part of a prescribed curriculum for obtaining a qualication recognized by a law of a foreign country covered in the negative list entry? No. To be covered in the negative list a course should be recognized by an Indian law. Within the term “educational institution”, sub-clause (iii) covers institutions providing services by way of education as a part of approved vocational course, and institutions providing the above courses will come within the ambit of the term educational institution. Notication No. 12/2017- Central Tax (Rate) dated 28th June, 2017, denes approved vocational education course as under:An “approved vocational education course” means, -(i) A course run by an industrial training institute or an industrial training centre aliated to theNational Council for Vocational Training or State Council for Vocational Training oeringcourses in designated trades notied under the Apprentices Act, 1961 (52 of 1961); or (ii) A Modular Employable Skill Course, approved by the National Council of VocationalTraining, run by a person registered with the Directorate General of Training, Ministry of SkillDevelopment and Entrepreneurship.It is to be noted that only those institutions whose operations conform to the specics given in the denition of the term “Educational Institution”, would be treated as one and entitled to avail exemptions provided by the law. This would mean that private coaching centres or other unrecognized institutions, though self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions available to an educational institution.Thus, educational institutions up to Higher Secondary School level do not suer GST on output services and also on most of the important input services. Some of the input services like canteen, repairs and maintenance etc. provided by private players to educational institutions were subject to service tax in pre-GST era and the same tax treatment has been continued in GST regime. Thusoutput services of lodging/boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualication recognised by law, are fully exempt from GST. Annual subscription/fees charged as lodging/boarding charges by such educational institutions from its students for hostel accommodation shall therefore, not attract GST.Similarly, output services related to the specied courses provided by IIM’s would be exempt. Executive Development Programs run by the IIM’s are specically excluded, hence such courses would be subject to GST. Prepared by: National Academy of Customs, Indirect Taxes & Narcotics GST  (GOODS AND SERVICES TAX) GST on Education Services  @CBEC_India@askGST_GoIcbecindia Follow us on: Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side. The four categories of services known as Auxiliary Education services, which educational institutions ordinarily carry out themselves but may obtain as outsourced services from any other person, have been exempted (as per Notication No. 12/2017- Central Tax (Rate)). Auxiliary education services other than what is specied above would not be entitled to any exemption. The exemption also comes with a rider. Such services are exempt only for educational institutions providing services by way of education upto higher secondary or equivalent. (from pre-school to HSC). Thus if such auxiliary education services are provided to educational institutions providing degree or higher education, the same would not be exempt. For instance, the services of conducting admission tests for admission to colleges in case of educational institutions are providing qualication recognized by law for the time being in force shall not be liable to GST. Who will pay GST? Education Services are under forward charge. Therefore, GST shall be paid by the supplier of services. What will be the Place of Supply of Educational Services where the location of supplier of services and the location of the recipient of services is in India? As per section 12(6) of the IGST Act, 2017, the place of supply of services provided by way of admission to an educationalor any other place and services ancillary thereto, shall be the place where the event is actually heldor such other place is located. As per section 12(7) of the IGST Act, 2017, the place of supply of services provided by way of, — (a) organisation of a cultural, artistic, sporting, scientic, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or (b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events: –(i) To a registered person, shall be the location of such person; (ii) To a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient. What will be the Place of supply of Educational Services where the location of the supplier of services or the location of the recipient of services is outside India? As per section 13(5) of the IGST Act, 2017, the place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientic, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held. Educational Institution run by charitable organizations Charitable Trusts running institutions conforming to the denition of Educational Institution as specied in the notication would be entitled to the exemptions discussed above. Apart from the general exemption available to all educational institutions, charitable activities of entities registered under Section 12AA of the Income Tax Act is also exempt. The term charitable activities are also dened in the notication. Thus, if trusts are running schools, colleges or any other educational institutions or performing activities related to advancement of educational programmes specically for abandoned, orphans, homeless children, physically or mentally abused persons, prisoners or persons over age of 65 years residing in a rural area, activities will be considered as charitable and income from such services will be wholly exempt from GST in terms of Notication No.12/2017- Central Tax (Rate) dated 28th June, 2017. Composite and Mixed Supply in so far as Education is 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 theservice which formsthe 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 considered for the purpose of determining the tax liability and in this case the entire consideration for the supply will be exempt. Prepared by: National Academy of Customs, Indirect Taxes & Narcotics GST  (GOODS AND SERVICES TAX) GST on Education Services
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