GST on Education Services, GST Rates HSN Codes for Education Sector

GST on Education Services, GST Rates HSN Codes for Education Sector. India’s most progressive tax reform is knocking on our doors, and CAknowledge.in team has taken various initiatives to facilitate successful implementation of this biggest reform in indirect tax structure and Indian economy. With a view to provide a basic understanding of GST to people at large CAknowledge.in has brought out this “GST on Education Services, GST Rates HSN Codes for Education Sector”

GST on Education Services

GST on Education Services

GST Rates on Education Services

 Code Description Rate
9992 Education services 18%
9992 Services provided –

(a) BY an educational institution to its students, faculty and staff;

(b) TO an educational institution, by way of,-

(i) transportation of students, faculty and staff;

(ii) catering, including any mid-day meals scheme sponsored by the Central Govt, State Govt or Union territory;

(iii) security or cleaning or house-keeping services performed in such educational institution;

(iv) services relating to admission to, or conduct of examination by, such institution; upto higher secondary:

Provided that nothing contained in entry (b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education up to higher secondary school or equivalent.

Nil
9992 Any services provided by, –

(a) National Skill Development Corp set up by Govt of India;

(b) a Sector Skill Council approved by the National Skill Development Corporation;

(c) an assessment agency approved by the Sector Skill Council or the National Skill Development Corporation;

(d) a training partner approved by National Skill Development Corp or the Sector Skill Council, in relation to-

  1. the National Skill Development Programme implemented by the National Skill Development Corporation; or
  2. a vocational skill development course under the National Skill Certification and Monetary Reward Scheme; or
    1. any other Scheme implemented by the National Skill Development Corp.
 Nil
9992 Services provided by the Indian Institutes of Management, as per the guidelines of the Central Government, to their students, by way of the following educational programmes, except Executive Development Programme:-

(a) two year full time Post Graduate Programmes in Management for the Post Graduate Diploma in Management, to which admissions are made on the basis of Common Admission Test (CAT) conducted by the Indian Institute of Management;

(b)   fellow programme in Management;

(c)   five year integrated programme in Management.

Nil
9992 Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship by way of assessments under the Skill Development Initiative Scheme. Nil
9992 Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya Grameen Kaushalya Yojana implemented by the Ministry of Rural Development, Government of India by way of offering skill or vocational training courses certified by the National Council for Vocational Training. Nil
9992 Services provided to a recognised sports body by-

(a) an individual as a player, referee, umpire, coach or team manager for participation in a sporting event organised by a recognized sports body;

(b) another recognised sports body.

Nil
9992 Services provided to the Central/State Govt, UT administration under any training programme for which total expenditure is borne by the Central/State Govt, UT administration. Nil
9992 Services provided by the National Centre for Cold Chain Development under the Ministry of Agriculture, Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination. Nil

HSN Codes on Education Services

581 9992 Education services
582 99921 Pre-primary education services
584 99922 Primary education services
586 99923 Secondary education services
589 99924 Higher education services
594 99925 Specialised education services
596 99929 Other education and training services and educational support services
597 999291 Cultural education services
598 999292 Sports and recreation education services
599 999293 Commercial training and coaching services
600 999294 Other education &training services nowhere else classified
601 999295 services involving conduct of examination for admission to educational institutions
602 999299 Other educational support services

Education Service under GST

Meaning of educational institution [2(y)]

Educational institution” means an institution providing services by way of,-

(i)  pre-school education and education up to higher secondary school or equivalent;

(ii)  education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;

(iii)  education as a part of an approved vocational education course.

Meaning of educational institution [2(y)]

In the context of vocational Education/training/skill development courses (VEC) offered by an institution, as an independent entity in the form of society or any other similar body, qualification implies a Certificate, Diploma, Degree or any other similar Certificate à

The words “recognized by any law” will include such courses as are approved or recognized by any entity established under a central or state law including delegated legislation, for the purpose of granting recognition to any education course including a VEC. [based upon F.No. 356/17/2012 – TRU dated 28.8.2012]

Meaning of approved vocational education course [2(h)]

“Approved vocational education course” means, –

  1. a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act, 1961 ; or
  2. a Modular Employable Skill Course, approved by the National Council of Vocational Training, run by a person registered with the Directorate General of Training, Ministry of Skill Development and Entrepreneurship;

Education Service under GST

Goods supplied by the educational institutions Notification 12/2017 exempts only the services. Hence, taxability of goods would depend upon exemption of goods notification no. 2/2017.

Whether composite activities, comprising of exempt and taxable supplies would be considered as composite supply, is again a difficult proposition. Section 2(30) is confined to “two or more taxable supplies, or any combination thereof”. Whether only two taxable supplies can be composite supplies or even a taxable supply and an exempt supply can be considered a composite supply needs to be analysed.

Services provided by international schools giving international certifications Services by way of education up to higher secondary school or equivalent are covered in this entry.
Services of lodging/boarding in hostels provided by such educational institutions (including annual fees / subscription charged as lodging/boarding charges) Exempt, if provided by educational institution as defined u/s 2(y)

vide press release

Taxability of training or coaching to the students or faculty Taxable @ 18%
Taxability of non-conventional courses, certificate courses and training programs Taxable @ 18%
Whether goods supplied by educational institution to the students are taxable Taxable: at the rate applicable to the goods
Foreign entities organize educational training events in India which is attended by individuals, participants from business entities and overseas participants as well Taxable under the GST
Franchisee/Joint Venture agreement (Say, A&B): Investment/ Infrastructure by party A and education be party B
(i)Renting service by A to B Taxable, being different entities
(i)Revenue sharing

(based upon advance ruling in the case of Choice Estates and Constructions Ltd. Vs. Commissioner – 2016 (5) TMI 515)

Both A and B have joined for  specific purpose of providing education, hence not taxable in the hands of A or B

However, GST is applicable on the revenue share to the extent it is relatable to rendering of taxable service

Postal coaching Taxable
Online coaching or teaching Taxable
Vocational course – Other than approved Taxable
Services provided by way of education as a part of a prescribed curriculum for obtaining a qualification recognized by a law of a foreign country – Whether covered in the exemption list Taxable; course should be recognized by an Indian law
Foreign entities organize educational training through internet / webinars  attended by individuals Not taxable, since service is provided by a person located in non-taxable territory to individual in India.
Fees for foreign courses Taxable
Private Tuition and coaching Taxable
Placement services provided to educational institutions for securing job placements for the students Taxable
If a course in a college leads to dual qualification only one of which is recognized by law would the service provided by the college by way of such education be covered in this entry

Based upon an Service tax education Guide dated 20.06.2012

Provision of dual qualifications is in the nature of two separate services as the curriculum and fees for each of such qualifications are prescribed separately.

Service in respect of each qualification would, therefore, be assessed separately.

If an artificial bundle of service is created by clubbing two courses together, only one of which leads to a qualification recognized by law, then by application of the rule of determination of taxability of a service which is not bundled in the ordinary course of business, it is liable to be treated as a course which attracts the highest liability of service tax.

However incidental auxiliary courses provided by way of hobby classes or extra-curricular activities in furtherance of overall well being will be an example of naturally bundled course. One relevant consideration in such cases will be the amount of extra billing being done for the unrecognized component viz-a-viz the recognized course

Exemption on support/ auxiliary services

[Confined only to these support services – Remaining are taxable}

Service provided TO an educational institution providing services by way of pre-school education and education up to higher secondary school or equivalent, by way of,-

(i)  transportation of students, faculty and staff;

(ii)  catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory;

(iii)  security or cleaning or house-keeping services performed in such educational institution;

(iv)  services relating to admission to, or conduct of examination by, such institution; upto higher secondary.

Education being exempt from tax, Education Institution would be unable to claim ITC on various other support services; and with the increase in rate of GST, they would have to increase the fee. Success of GST depends upon seamless input tax credit.

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