Education Sector is most crucial for the development of any nation. The education sector of any nation decides how the nation will flourish in the times to come. That’s why the Government of India has identified this sector as the most crucial and levies almost no tax on it. Besides this, there are certain services in the education sector which are auxiliary to the education, like coaching and training which are taxed by the Government.
Under GST regime, the educational services like -
Pre-school education and education up to higher secondary school or equivalent
Education as a part of a curriculum for obtaining a qualification recognized by any law
for the time being in force.
Education as a part of an approved vocational education course.
Services provided by educational institutions up to higher secondary school or equivalent
to students, faculty and staff by way of -
i. Transportation of students, faculty and staff;
ii. Catering, including any mid-day meals scheme sponsored by the Government;
iii. Security or cleaning or house-keeping services performed in such educational
institutions;
iv. Services relating to admission to, or conduct of examination by such institution
up to higher secondary level;
v. Entrance exam fee is exempted from the GST.
Services provided by the IIM, except the executive development programme; are kept out of the purview of taxation like it used to be in the pre-GST regime.
Apart from above services, the services provided by the coaching institutes and the services of IIM by way of executive development programme where service tax was levied before roll out of GST at the rate of 15 per cent now attracts 18 per cent GST. Hence, the only impact which GST has on the education sector is the increase of tax rate by 3 per cent on coaching and training services by the private institutions.
Education Services provided by educational institutions up to higher secondary school and Education Services as a part of a curriculum for obtaining a qualification recognized by any law are still exempted from GST. Since education is necessary for every economy/ nation and in order to achieve the vision of the Honorable Prime Minister of educating one and all, the Government will have to join the hands with private players to achieve this uphill task. So, instead of increasing the gap between private institutions and Government run-institutions by taxing the private education sector, the Government should try to subsidize private education by reducing the GST on them.
