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GST won’t make a difference to education: Finance Ministry


NEW DELHI: The government has said education will not become expensive under the goods and services tax (GST) that rolled out on July 1. Schooling up to higher secondary and most of the services provided to educational institutions are exempt from taxation under GST, finance ministry said.

“There is no change made in any subject relating to education in the GST era, except to reduce tax rate on certain items of education such as school bags etc,” a finance ministry statement said on Friday.

Mid-day meal scheme as well as security, cleaning and housekeeping services performed in educational institutions up to higher secondary are also exempt from GST. Services relating to admission and examination up to higher secondary are exempt under GST, the statement said. The clarification came following concerns in some quarters that education will become expensive under GST.

Services provided by an educational institution to students, faculty and staff are exempt. Transportation of students, faculty and staff services provided to an educational institution providing pre-school education, and education up to higher secondary school or equivalent are exempt from GST.

Catering, including any mid-day meals scheme sponsored by the Central government, state government or union territory, to an educational institution providing education up to higher secondary school or equivalent, are also exempt.

“Thus, education up to Higher Secondary School level does not suffer GST on output services and also on most of the important input services. Some of the input services like transport, canteen etc provided by private players to educational institutions were subject to service tax in pre-GST era and the same is continued in GST regime,” the statement said.

Furthermore, services by an entity registered under section 12AA of the I-T Act by way of charitable activities relating to advancement of educational programmes or skill development for abandoned, orphaned or homeless children, physically or mentally abused and traumatised persons are also exempt.

There have been reports education cost for certificate courses could go up as input tax credit is only available for primary education. Any institution providing education above higher secondary in cases where degree is not recognised under law would not be able to claim input credit. Industry had represented to the government on this issue.

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