GST on education service

Education :

Education is the process of training, learning, acquisition of knowledge, skills, values, beliefs, habits and  character of the persons. It includes storytelling, discussion, teaching, training, and research. Education can take place in formal or in an informal way.

Education is commonly divided formally into such stages as preschool or kindergarten, primary school, secondary school and then college, university, or apprenticeship.

A right to education has been recognized by some governments and the United Nations. In most regions, education is compulsory up to a certain age. In India, the government has a constitutional obligation to provide free and compulsory elementary education to every child.

Education under GST :

Education is not defined under any of the GST Act. Segregation of services provided by Educational Institute is highly important to compute the applicability of GST. As per the notification core educational services are exempt while other services by educational institutions are taxable. Education Services are classified in heading 9992  and are further sub-divided into six groups comprising of Pre-primary, primary, secondary, higher, specialised and other educational & support services.

However commercialisation of education is also there by the Private Institute.  The contradictory is whether the Education should be Exempted or it should be taxable .

Educational Institution :

Directorate General of Taxpayer Services

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. Within the term 'educational institution', sub-clause (ii) covers institutions providing services by way of education as a part of curriculum for obtaining a qualification recognised by any law for the time being in force. This is an area where doubts have persisted as to what would be the meaning of 'education as part of curriculum for obtaining qualification recognised by Indian law'. Conduct of degree courses by colleges, universities or institutions which lead grant of qualifications recognized by law would be covered. Training given by private coaching institutes would not be covered as such training does not lead to grant of a recognized qualification.

Private coaching centres or other unrecognized institutions, though self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions available to an educational institution.

Place of Supply :

The place of supply of services provided by way of admission to an educational or any other place and services ancillary thereto, shall be the place where the event is actually held or such other place is located.

The place of supply of services provided by way of, -

(a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration o similar events; or

(b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events: –

(i) To a registered person, shall be the location of such person;

(ii) To a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient.

Taxability under GST:

It is to be noted that only those institutions whose operations conform to the specifics given in the definition of the term 'Educational Institution', would be treated as one and entitled

to avail exemptions provided by the law.

Education Services are under forward charge. Therefore, GST shall be paid by the supplier of services.

Regarding, input services, it may be noted that where output services are exempted, the Educational institutions may not be able to avail credit of tax paid on the input side.

Different Scenarios :

1. Charitable Trusts running institutions conforming to the definition of Educational Institution as specified in the notification would be entitled to the exemptions .

2. Boarding schools which provide the education along with residence and food will come under the activities under ordinary course of business under bundle services. The bundle of services will be treated as consisting entirely of the principal supply, which means the service which forms the predominant element of such a bundle. In this case since the predominant nature is determined by the service of education, the other service of providing residence and food during education period  will not be considered for the purpose of determining the tax liability and in this case the entire consideration for the supply will be exempt. Annual subscription/fees charged as lodging/ boarding charges by such educational institutions from its students for hostel accommodation shall therefore, not attract GST.

3. The supply of placement services provided to educational institutions for securing job placements for the students shall be liable to GST. Similarly, educational institutes charge a fee from prospective employers who come to the institutes for recruiting candidates through campus interviews in relation to campus recruitments. Such services shall also be liable to GST.

As the world is moving forward with technology , Education sector also started providing the service through Technology like Satellite, Video Conferencing, Online Coaching, education through website, mobile app, pre-recorded video, Online Certification course on payment, Online Certification course for free etc. It's very easy to get education at any place from anywhere from the world through this online education. This saves a lot of travel time, separate boarding cost , Travel cost. Also through online education people get very good quality of education with affordable cost as per their choice.

Conclusion:

A right to education has been recognized by some governments and the United Nations. In most regions, education is compulsory up to a certain age. In India, the government has a constitutional obligation to provide free and compulsory elementary education to every child. Education is now a fundamental right to every child in India. By taking this in to consideration, GST law provides exemption to educational services provided by educational institutions up to higher secondary school or equivalent. Other services related to education, not covered by the exemption, would be taxed under GST with full admissibility of ITC for such taxable services in cases where the output service is not exempt.