CBIC Waives GST Fee on Entrance Exams & Relevant Services via NBE

In a country where the Right to Education is in force, The cost of education in India is skyrocketing since the last few years and it is an item of main expenditure in the checklist of the parents. In an attempt to ease the burden of heavy fees on the parents, the government has waived the GST on the fee of entrance exams and related services that are provided by the National Board of Examinations.

A circular has been issued by the Central Board of Indirect Taxes and Customs (CBIC) yesterday clarifying that the taxability of numbers of services that are supplied by Centre and State Boards such as the National Board of Examination (NBE) where it was announced that no GST shall be imposed on services including entrance examination ( on imposing a fee) for admission to the educational institution along with the input services for conducting such entrance examination for students.

Nevertheless, the circular made a clarification that the services that are related to the accreditation of the educational institutions or professional institutions so as to empower them to provide their respective services shall be chargeable to GST (Goods and Services Tax). Recalling the role of NBE, it provides services related to

• Conduct entrance examinations for admission to various courses that include Diplomat National Board (DNB) and Fellow of National Board (FNB)
• Advice and authorizes courses and curricula for PG medical studies,
• holds various examinations and
• grant degrees, diplomas, and other related academic distinctions.

It carries out all activities as are generally performed by central or state educational boards and consequentially is a central educational board.

As per explanation 3(iv) of notification bearing Number 12/ 2017 CTR, “Central and State Educational Boards” are dealt with as Educational Institution for the narrow purpose of providing services by conducting examinations to the students. Consequently, NBE can be categorized as an ‘Educational Institution’. The reason being it provides services by conducting examinations including the conduct of entrance examination to the students.

Considering the above fact, the GST Council had provided recommendations in its last meeting that was held on 28th May 2021. The circular clarified that “GST is exempt on services provided by Central or State Boards ( including the boards such as NBE) by way of conduct of examination for the students, including the conduct of entrance examination for admission to the educational institution [under S. No. 66 (aa) of notif No. 12/2017-CT(R)]. Therefore, GST shall not apply to any fee or any amount charged by such Boards for the conduct of such examinations including entrance examinations.”