GST Impact on Education Sector in India

“Education” is not defined in the CGST Act but as per the Apex Court decision in “Loka Shikshana Trust v/s CIT”, education is the process of training and developing knowledge, skill, and character of students through normal schooling.

Education is one of the major sectors of any economy. The education of a country’s youth decides how the economy of that country will flourish. Education promotes understanding, vision, creativity and productivity of people which helps in the advancement of a country. In India, Education is provided both by the public as well as the private sector.

Indian government’s foremost priority is to provide low-cost education to one and all. That’s why the education sector enjoys lots of tax exemptions as they are not taxed or come in the negative list.

After the implementation of GST, a similar situation continued with the tax exemptions for the sector being retained and the most important thing is that educational services and services related to the education/higher education provided to the students are covered under the GST exempt list.

According to the GST proposed law, services provided by educational institutions have been kept outside of the Goods and Services Tax (GST). Here educational institutions mean any of the institutions providing services by way of:-

• Pre-school education and education up to higher secondary school or equivalent or
• Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; or
• Education as a part of an approved vocational education course

Latest Update in Education Sector

20th February 2023

• The National Testing Agency (NTA) is conducting entrance examinations for universities, engineering and medical colleges across the country. The 49th GST Council meeting concluded on Saturday with NTA exams being exempted from the levy, said Union Finance Minister Nirmala Sitharama. Exam fees charged by the NTA and state testing agencies previously included 18 per cent GST. Read More

26th December 2022

• Kota University’s affiliation with its constituent colleges for imparting education was declared a supply by the Rajasthan Authority of Advance Ruling (AAR) and taxable under GST. Read more

11th April 2022

• The Gujarat High Court has issued the judgment in the case of M/S Educational Initiatives PVT. LTD. The judgment has granted GST exemption in relation to the ASSET test to schools or education organizations. Read More

17th February 2022

• The Karnataka AAR has issued the order for Sri Sairam Gopal Krishna Bhat. The order said that an 18% GST rate is applicable on the income which is earned from performing guest lectures. Read More

5th January 2022

• More than 130 colleges that are affiliated with GGTU in Banswara protesting against the 18 per cent GST rate on affiliation fees.

27th November 2021

• The Telangana AAR has given a significant order which is related to the NIL GST rate on examination materials for school/colleges and universities. The petitioner’s name is M/s. Hitech Print Systems Limited. Read More

23rd November 2021

• The University of Anna has been notified to pay 18 per cent goods and services tax on an application for migration certificates, provisional certificates, consolidated mark statements, grade sheets, verification of certificates and degree certificates as per the GST Act 2017. “The services which are part of the curriculum are exempted under GST. All other services are taxable as per GST Act 2017, a circular from the controller of examinations said. Students who graduate need to pay GST for provisional certificates, consolidated mark statements, grade sheets and degree certificates. They also need to pay the tax for getting duplicate certificates of grade sheets, provisional certificates and consolidated mark sheets.”

20th November 2021

• The Director of Colleges J&K, Prof Yasmeen Ashai, (ICMAI) Institute of Cost Accountants of India, Srinagar has organized the event related to a new skill under the GST name.

CBSE Postpones 10th & 12th Board Class Exams Due to COVID-19

Due to covid-19, the class 10th exam has been cancelled and the exam for class 12 has been extended by the Central Board of Secondary Education (CBSE) on Wednesday. From May 4 the CBSE 10th and 12th board exams were scheduled. This decision was opted by Prime Minister Narendra Modi, Union Education Minister Rame along with the major authorities who were present in the meeting. The decision is opted as per the surge in the cases of covid-19 in various states. The conditions going in present were being shut down in 11 states.

Covid19: Govt Extends Payment of School Fees to 3 Months

With the development of the coronavirus pandemic across the globe, the Indian government has taken the decision to extend the payment date of school fees and other monetary obligations to 3 months in the view of current covid 19 lockdown. All the schools and concerned institutions are required to follow this obligation as per the order.

Telangana State Board To Add GST in Curriculum

The Telangana state board has rolled out the revised curriculum under which the goods and services tax will be included. The state board had earlier mentioned that it will add the required course of the GST in the textbooks as per the GST department.

Following Education Related Services are Exempt Under GST:

• Curriculum-related or course materials,
• Assessment and examination fees,
• Student administrative services such as registration, the printing of academic transcripts, issuing or replacement of student cards, late fee payments, administration of the library etc
• Excursion and field trips related to the course of study or part of curriculum requirement, except for food and accommodation supplied on those trips
• Services provided by educational institutions to students, faculty, and staff
  • Transportation of students, faculty, and staff;
  • Catering, including any mid-day meals scheme sponsored by the Government;
  • Security or cleaning or house-keeping services performed in such educational institutions;
  • Services relating to admission to, or conduct of examination by, such institution; up to higher secondary
  • The entrance exam fee is exempted from the GST

The exemption has also been granted to the services provided by the IIM–

• 2-year full-time residential PG programs in Management for Post Graduate Diploma in Management, admission in which is granted via CAT
• Fellowship programs in Management
• 5 Year Integrated Programs in management studies (but excludes the Executive Development Program).

The Education Provided By Below Are Also Exempted Under GST:

• National skill development corporation set up by the Indian government
• National skill development corporation approved sector skill councils
• National skill development corporation approved assessment agencies
• The national skill development programs approved by NSDC
• A vocational skill development program approved under national skill certification and monetary reward scheme
• Any scheme implemented by NSDC with training partners

Apart from the above, the educational training and coaching provided by coaching centres are not exempted under GST.

The following are not Exempt from GST:

• Supplies provided by third parties like the musical instrument, computers, sports equipment,
• After-school activities offered directly by third parties,
• Food and accommodation supplied for the excursion as described above,
• Uniform, stationery, and other non-academic related supplies

The school will not impose GST on the taxable supplies immediately but there might be some adjustment to the prices of school taxable supplies in the event the cost is higher to procure those supplies.

Education Provided By Higher And Private Institutions:

The education provided by the private school from preschool to higher secondary is exempted under GST. Apart from the exemption, one should also divert towards the fact that the education provided by the private institutions currently grabbing the nation at a fast pace will likely get expensive by up to 3 or 5 per cent after the rollout of the new goods and services tax in India. As institutions and universities are not mentioned in the exempted list, it is expected that 18% of GST to be levied on them. All the other cases of charity or giving poor education assistance still counted as exemptions but still, the Indians consider private education most preferred and would pay an extra penny to claim it for their children.

Read Also: List of Goods and Services Not Eligible for Input Tax Credit

Education By Coaching Institutes

Coaching institutes are playing a very important role in today’s competitive world. Most of the students are enrolling in coaching institutes and want to crack competitive exams. Previously, the government charged a 14% tax on all such education and now it is increased to 18% which will be disappointing for the students preparing for government exams, IITs, banking, and other professional courses.

GST Certified Courses at Various Universities

After the implementation of the goods and services tax, it has become hard to understand the new indirect tax regime but there are certain universities which provide specific courses on GST. Candidates can not even know how the working of GST but they can also find an opportunity under the new GST regime upon selecting these courses.

ICAI Course: The ICAI have started a dedicated course for the understanding of goods and services tax. The course will make the student acknowledge all the details and fabrics of GST. The course is certified by the organization and a certificate will be provided to the candidates upon completion of the GST course.

Dr Bhimrao Ambedkar University: The university had started the course the previous year having a length of 6 months. A lot of candidates approached the university and applied for this certified GST course in which the sessions will be taken by senior college professors and tax professionals.

Lucknow University: The university had offered GST-certified courses earlier this year but in the viewpoint of surged demand, Lucknow university extended the seats to 120.

Delhi University: The department had earlier discussed the inclusion of certified GST courses within the curriculum. There might be soon GST related course at Delhi University.

IIM Comes under GST Tax Net

Madhya Pradesh Authority for Advance Rulings has cleared that the Executive post-graduate programmes offered by the Indian Institutes of Management (IIMs) will attract GST.

However, the Indian Institutes of Management Act, 2017, gives tax exemptions for courses offered by the IIMs but the ruling said that the executive programmes are not categorically exempted from tax.

The application by IIM Indore was replied to by the MP AAR that the Executive Post-Graduate Programme in management is surely taxable under GST. But the services provided by the educational institutes are exempted from GST.

From this, it is clear now that only certain courses from IIM are exempted while others are taxable as per the ruling. It is better for the students to check if the course is taxable or not prior to admission.

Decision Over GST on School

The following Activities Will Attract GST:

• If the school run summer camps or coaching classes for other students apart from the school students.
• If the school rent the school premise for marriage and other functions.
• If the doctor or hospital makes earning more than Rs. 20 lacks by selling unused and other instruments.

Moreover, it is also announced that the money spent on the office canteen will not be eligible for ITC. Further, the company will also not get a GST rebate on expenditures made for buildings and vehicles. An e-way bill will be rendered in case of shipment by Airplane as well.

NSDC & BFSI Brings GST Accounts Assistant course

In a direction to improve better understanding of goods and services tax in the market and professional National Skill Development Corporation (NSDC) along with BFSI (Banking, Financial Services and Insurance) brought a GST Accounts Assistant course.

There are multiple procedures under the goods and services tax regime which need to be understood at the earliest, so for this purpose, this course has been presented by the authorized department of the government of India.

The said ‘GST Accounts Assistant course’ has been prepared under the directorship of the National Academy of Customs, Indirect Taxes and Narcotics (NACIN) with NSDC which will further provide 20 lectures both offline and online.

Those people who have completed their 10+2 education with basic knowledge of accounting can do this course which will further boost their knowledge in the field of GST and would sharpen their skills in professional terms.

How GST Referred in Kautilya Arthashastra

Goods and services tax is not only a modern topic but it was also discussed long ago in the advising era of Kautilya also. According to the news surfacing in the newspapers and some social media pages, it is said in the example part of the Banaras Hindu University, the students were asked about eh the GST in the medieval period and to be exact in the time of Kautilya.

In the paper ‘Social and Political Thought of Ancient and Medieval India,’ there has a question which states that: “Write an essay on the nature of GST in Kautilya Arthshastra”. The question itself makes some confusion in the heads of the students, but there was no one to answer this question or to explain the reason behind the inclusion of this question in the exam paper.

GST Is In Syllabus Making Students Tensed

In consideration of operation and innovation in study courses, Kota university has changed the syllabus of B.com and M.com final-year students and added Goods and Services Tax in the study material. But the main problem is that the government is not able to provide books even after 6 months of session duration and this is making many students worried.

Although GST was launched on 1 July, the government has taken months to decide on GST provisions. Even tax consultants are in confusion and still, Kota University added GST to the syllabus for B.com and M.com students.

University has added taxation as the subject in the B.com final year and direct & indirect tax in the M.com final year. The same syllabus is provided for Graduates and postgraduates. The Academic Council and Board of management have given consent as well. As the full content on GST is not available, so it is making the students in big hurdles.

Maharashtra Includes GST Chapter in Class X Textbooks

Tenth Standard students of The Maharashtra State Board of Secondary & Higher Secondary Education will now be studying GST, the less than a year old ‘One Nation One Tax’ system. GST has been extensively dealt with and forms an important part of the chapter on financial planning in the Part 1 Mathematics textbook(Class X).

The textbook published from the printing house of the Maharashtra State Bureau of Textbook Production and Curriculum Research, Pune is a welcome move that must be followed by other state boards.

The chapter covers all important sections like Introduction to GST, Tax invoice, GST computation and ITC. In addition to these topics, the sections conclude with important examples of tax calculations and slabs.

What does the GST Chapter promise to teach Students?

• Details on how GST has subsumed all pre-existing independent taxes like – VAT, excise duty, customs duty, entertainment tax, central sales Tax, service tax and octroi
• The two components of GST – Central GST and State GST (CGST/IGST and SGST)
• Importance of GST IN ie Goods and Service Tax Identification Number
• The Five TAX slabs part of the unified Tax System from the zero-rated goods and services to the highly-rated (28 %) ones with proper examples.

GST Applicability to School-provided Food and Drinks

As per a statement made by the Finance Ministry, GST is not leviable on foods and drinks that are supplied by schools (up to higher secondary) directly to their students. However, food items supplied by school canteens and mess are taxable at a 5 per cent GST rate with no input tax credit.

Colleges Adding GST Courses Frequently

Vidyanth PG college has started a diploma course based on the newly implemented indirect goods and services tax. Candidates can gain an application form at the college counter, however, any fee for the form is not disclosed.

The principal of the college mentioned that the candidates will be taught basic and behavioural working on goods and services tax. Professors are directed to teach the course with diligence and pay attention to each and every doubt of the students.

For this, the college had also opened a total of 30 computer labs which will try to expand the knowledge of the candidates through the digital mode.

GST is to be included in the ICSE Syllabus from Next year

The Council for the Indian School Certificate Examination (CISCE) has made GST as part of the syllabus for 10th-standard ICSE students. Previously, the erstwhile VAT(value-added tax) system was part of the syllabus. But from the new session onwards, the CISCE will replace it with the GST. The decision comes to post the decision by other universities around the country to include GST as part of their curriculum. The move is aimed at bringing uniformity in exam patterns across the country. Reportedly, GST will be taught as a section in Mathematics. All Council schools will be updated with the new syllabus. Other changed parts of the syllabus for the new session have been uploaded on the official website. The Council has also decided that the Question Papers for the 9th and the 11th standard exams will be prepared by the Council itself.

Gujarat Will Soon Educate 11th & 12th Students With GST

Gujarat will be first among the Indian states who will impart complete Goods and services tax education right from starting of the 11th and 12th standards of commerce stream.

The state will provide education on GST as a subject decided by the education department of Gujarat and now going through discussions on how to provide such education and in which format.

The department head told that the curriculum is discussed with 9 famous chartered accountants and finance department experts and has collectively taken the decision to include the GST as a topic in the studies soon.

The education department will adjust the theory part of GST in economics and the practical part in the accountancy course. It is expected that soon all the schools and colleges will offer courses based on GST.