Kerala AAAR: 18% GST Rate Applicable for Pvt Coaching Institutes

Private Coaching centres have not been spared from paying taxes. This ruling has been given by the Appellate Authority on Advance Ruling (AAAR), Kerala. Private Coaching Centres shall have to pay GST Check out due dates of payment under GST for general and composition taxpayers in India. We have included penalty charges on late payment with interest at the rate of 18% as they are not considered educational institutions in the eyes of the law. In other words, they do not award any degree or grant the qualification but only acts as facilitators. It is worth mentioning here that educational institutions get tax exemption.

The Ambit of Private Coaching Centres

Private coaching Centres facilitating to obtain qualifications like the Chartered Accountancy, Company Secretary, Cost Accountancy, and so on comes with the purview/domain of private coaching, not educational institutions owing to the fact that

• The services that are tendered by these Coaching only help them to get a degree from professional bodies but don’t grant degrees
• It is not mandatory to join these coaching classes for clearing the aforesaid exam

This ruling came to AAAR Karnataka when the appeal was filed by the Logic Management Training Institute, Kochi against the May order of the AAR, Kerala. The AAAR, Kerala observed that the appellant has not been providing

• Any Elementary Education
• Pre-School Course
• Higher Secondary Level or its equivalent
• Vocational/Skill Development course
• Not Issuing CA, CS, or other Course

Hence the aforesaid coaching institutions cannot be held as institutions granting recognised education. Private coach centres are self-styled as educational institutions but actually, they are coaching centres.

The AAAR, Kerala further passed a ruling that the whole consideration that has been received by the appellant from the students as examination fees/hostel fee/textbooks to students shall not come within the domain of educational organisations and would be qualified as a Composite Supply.