In the Union Budget, the Coaching Federation of India has urged Finance Minister Nirmala Sitharaman to rationalise Goods and Services Tax (GST) on coaching and supplementary education services, claiming the existing tax structure is pushing up costs for parents and squeezing small education businesses.
The Coaching Federation of India (CFI), New Delhi, in a representation submitted on January 28, cited that the claims to represent a large number of coaching centres in the nation asked for a GST reduction on coaching services to 5% or a complete exemption, citing that unlike manufacturing or trading businesses, coaching institutes have confined scope to offset tax through input tax credit
“As a result, the GST becomes a direct add-on to student fees, effectively shifting the burden to parents,” the Federation cited in its letter to the finance minister.
Outline that coaching can no longer be consider as a discretionary service, Keshav Agrawal, Vice President, CFI, said, “With competitive exams such as JEE, NEET, CUET, CA, CLAT, SSC and UPSC becoming central to academic and career pathways, coaching has become a necessity for many middle-class families, “In its letter, the CFI specifies Rs 20 lakh GST exemption threshold, calling it outdated in an era of rising rents, salaries and operating costs.”
It has proposed raising the limit to Rs 1 crore for coaching and supplementary education services, citing that the current cap forces even small centres with lower margins into the tax net. At the same time, the larger chains benefit from scale and compliance capacity.
As per the Federation, the existing tax regime is distorting the sector by motivating informality, with some small centres choosing to stay unregistered or parents preferring “no-GST” options.
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Also, the Federation recommended that a balanced tax structure shall enhance voluntary compliance, make education cheaper, and align with national objectives under the National Education Policy-2020. It asked for a stakeholder consultation with the finance ministry to represent the ground-level data before the presentation of the Union Budget dated 1st Feb.