AAR: Coaching Center Not Eligible for GST Exemption, Out from Education Institutions Category

According to the Kerala Authority for Advance Ruling (AAR), coaching and training services do not meet the criteria for being considered an “educational institution” for the purposes of claiming a GST exemption.

S.L. Sreeparvathy and Abraham Renn S, a two-member bench, have noted that the definition of “educational institution” encompasses institutions engaged in providing education as a part of an approved vocational education course as well as those providing education as part of the curriculum for obtaining a qualification recognized by any law currently in effect.

The applicant has its own online platform to provide students with educational services.

Read Also: Impact of GST on Coaching Classes in India

The applicant asks for the advance ruling that if the transaction between the applicant and individual student on one-to-one grounds along with furnishing education up to higher secondary school comes under Sl. No.66(a) of Notification No. 12/2017 CT (Rate) on June 28, 2017.

The educational services are categorized beneath Heading 9992 in Notification No. 11/2017-Central Tax (Rate) on June 28, 2017. The education services beneath Heading 9992 would be subdivided into 6 groups, that consist of pre-primary, primary, secondary, higher, specialized, and other educational and support services.

The term “educational institution” would be described under clause (y) of Paragraph 2 of Notification No. 12/2017 CT (Rate), on June 28, 2017. “Educational institution” refers to a facility that offers pre-educational and educational services up to the equivalent of higher secondary school; Education as a requirement for completing a qualification leading to a credential recognized by any legislation now in effect; and education as a component of a recognized vocational education program.

Read Also: GST Impact on Education Sector in India

The AAR revealed that for qualifying for exemption under Sl. No. 66(a) of the Services Exemption Notification, the petitioner must be an “educational institution” as mentioned beneath clause (y) of Paragraph 2 of the Services Exemption Notification. The applicant is an organization that offers specialized training or coaching to kids enrolled in official schools for education up to high school or the equivalent but is not a formal school.

The authority noted that the applicant’s training neither contributes to the granting of a qualification acknowledged by any currently in effect statute nor is a component of a recognized program of vocational education.