Education plays an important role in a country's economic progress. The Indian government spends a significant portion of its GDP, around 4%, on education, with half of that going towards primary education. There is uncertainty around how the new GST regime will impact the education sector, as coaching centers and training institutes were previously exempt from taxation but may now be taxable. While some education services provided by the government are exempt, it is unclear whether private coaching and training centers will receive exemptions. The implementation of GST could increase costs for education through higher taxes and increased regulatory and administrative requirements for service providers, but it may also simplify the process of claiming input tax credits.

1. Educationplaysan importantrolein theadvancementofa progressiveeconomy. Howa country nurturesits
generations with comprehensive education decides the progress ofthatcountry. InIndia, public and private,
both sectors areengagedin providing education to enhanceproductivityand creativity ofitspopulation.
IndianGovernment spends a lotofits earningson education,especially primary education.On an average, 4%
ofGDP is set asideforeducationin Indiaby thegovernmentin whichfifty percentis allocatedonly forprimary
education.
The impactofGSTlaws andtheirintroduction on educationsectoris thematterwatched closely by many
experts.AsGSTwill apply onall thegoods andservices, will it also includeentitiesengaged in educational
services?Till now,theeducational sectorwas totally exemptedfromservicetax.
What is thecurrent formatoftax on education sector?
Under section 66D(i), delivery ofeducationis in NegativeList. Entitiesareexempted fromtaxes ifthey are
deliveringcurriculumprescribed forauthentic qualificationapprovedby thegovernment.Degreecourses
conduct by authentic universitiesas well as vocational trainingis also listed in thenegativelistoftaxation.
However, coaching and training centersareexcludedfromthislist. They canenjoy exemptiononlyunderthe
subject ofNotification No.25/2012-STdated20/6/2012.
Services exempted underNotificationNo.25/2012-STdated 20/6/2012videentry no 9 and 9A are:
Under Entry 9:
I. Serviceprovided by an educationalinstitutionto itsstudents, staff,and faculty
II. Serviceprovided to an educationalinstitutein theway of
· Transportationservices to educationalinstitute
· Catering (includingMid-Day Meal)to institute
· House-keeping, cleaning,security services to educationalinstitute
· Institutionsprovidingservices ofconductingadmission orexamination foreducationalinstitutes
Under Entry 9A:
Serviceprovidedby-
I. A SectorSkill Councilapprovedby theNational Skill Development Corporation;
II.National Skill Development Corporation setup by theGovernmentofIndia
III.Anagency recommendedby SectorSkill Council orNational Skill Development Corporation
IV.Trainingpartnerrecommended by National Skill Development Corporation orSectorSkill Councilin
concern to –
· Vocationalskill development courseunder NationalSkill CertificationandMonetary RewardScheme
· National Skill DevelopmentProgramimplemented by NationalSkill DevelopmentCorporation
· Other schemeimplemented by National Skill Development Corporation
AssessmentofGST Regime

2. The current model ofGSTdoes not contain tax privileges andtax exemption.Astheconceptofserviceis quite
wide, it appearsthat services such as coaching andtraining centermightcomeunderthescannerofGST. In the
new tax proposal ofGST, it is clearly termedthatactivities ortransactionsnot listedin ScheduleIV are taxable.
In the GSTAct, Clause3 ofSchedule IV disclosed thatservicesprovidedfor education by local authorities of
government shall not beconsideredtaxable.
Educationservices definedin ScheduleIV:
· Pre-school, primary,and highersecondary school
· Educationcurriculumrecognizedby law
· Educationapproved as vocationaleducation course
It seems thateducation services providedby Indian governmentorlocal authoritieswill not come underthetax
regime.Thereis no guidanceon exclusionandinclusion oftraining centersand coachingclasses relatedto
education. Itwillbecome clear ifany lawis proposed in this section foreducationservices.
What Will Be ImpactIn GST Regime?
Accordingto GSTLaw Model,it is assumed thatGSTwill impacteducation sector on both ways, positively and
negatively.
· The tax rateis likely to getraisedby 3-5%becauseGSTexpectedrate maylevyaround18-20%. Ifgovernment
considerscoachingan essential service,peoplecanexpectlowerGSTon such services.
· Government’sconcern is therein the valuationofcoaching servicesin terms oftheir practiceofscholarship,
concession,and discounts. Thevaluation ruleproposedis differentfromexistinglaw.Coachingandtraining
centers will needto frameappropriatepolicy andmake documentation ofsuch discounts.
· Registration in each stateis compulsoryfor such serviceproviders who have central registration.Either
throughtheown account or franchiseagent, it is mandatoryto registerin every statein whichtheyare
operating.
· Properprocedurewillbe mandatoryforall receiptsandinvoices towards outwardand inwardsupplies. Same
shouldbeuploadedin the systemas prescribed.
· Filing ofnumbersofreturnsand itsfrequency maygo up
· GST audit is provisionedifturnoveris above1 crore
· Positiveimpact on theprocedurefor takingcreditofinputtaxes.It will becomeeasy and seamless.
Conclusion:
Being a developing country,it is mandatoryforthegovernmentto puta lesser burdenoftax on theeducation
sector.Indirectly,thetaxesleviedon coaching centersandtraining institutes will beburdenedon students and
their parents. Hence, a seamlesscredit should beallowedin theeducation chainto keepthecost ofeducation
lowerin today’s scenario.
****FollowingEducation Related Services arementioned UnderGST:
 Curriculum orsyllabusrelatedorcoursematerials,
 Assessment andexaminationfees,
 Studentadministrativeservicessuchas registration, printingofacademic transcripts,issuing or
replacement ofstudentcards, latefee payments, administrationofthelibrary etc.

3.  Excursionand field trips related to thecourseofstudyor part ofcurriculumrequirement,except for
food andaccommodationsuppliedon thosetrips.
****FollowingEducation Related Services are not mentioned fromGST:
 Supplies providedby thirdparties likemusical instrument, computers, sportsequipment,
 Afterschoolactivitiesoffereddirectly by thirdparties,
 Food and accommodation suppliedforexcursionas describedabove,
 Uniform, stationery,andothernon-academic related supplies
The schoolwill notimposeGSTon the taxablesuppliesimmediately buttheremightbe someadjustmentto the
prices ofschool taxablesuppliesin theevent thecostis higherto procurethosesupplies.
The schoolmay needto registerGST and start to imposethe GST chargeson the taxablesuppliesat a future
date.
In orderto providereal benefit to theeducationsectortaxes to bepaidoninputs mustbe doneaway with so
that even ifGSTcomesinto force,thetotal costofeducationwill belowerthan what it is today.