GST on Education Service
This query is : Resolved
02 December 2025
An educational trust has signed MOU with govt.college to provide self financing course recognised by law to the students. The college collect fee from the students and gives 70% of the fee to the trust. Whether it is a taxable supply for the trust and gst tds will be deducted by the college?
As per entry 66 of NN 12/2017, educational institution providing education service recognised by law is exempted.
In this scenario what is the gst implication on trust who had collaborated with govt.college for providing self financing course
As per entry 66 of NN 12/2017, educational institution providing education service recognised by law is exempted.
In this scenario what is the gst implication on trust who had collaborated with govt.college for providing self financing course
03 December 2025
If the government college itself is the “educational institution” imparting education recognized by law, then the fee collected from students is exempt under Entry 66 of Notification 12/2017-CT (Rate). However, the trust is not itself an “educational institution” under GST law. Its share (70% of fees) is treated as consideration for services provided to the college, which is a taxable supply. Therefore, GST is applicable on the trust’s share, and the college must deduct GST TDS (Section 51 of CGST Act) when making payment to the trust.
03 December 2025
1. Definition of Educational Institution
• As per Notification 12/2017-CT (Rate), “educational institution” means one providing:
• Pre-school to higher secondary education, or
• Education as part of a curriculum for obtaining a qualification recognized by law, or
• Education as part of an approved vocational course.
• In your case, the government college qualifies as an educational institution since it awards degrees recognized by law.
2. Exemption under Entry 66
• Entry 66 exempts services provided by an educational institution to its students, faculty, and staff.
• Thus, the college’s service to students (collecting fees for recognized courses) is exempt.
3. Role of the Trust
• The trust is not directly imparting education to students under recognized law.
• Instead, it collaborates with the college and receives 70% of fees as consideration.
• This arrangement is viewed as the trust providing support services to the college (like faculty, infrastructure, or course management).
• Such services are not covered under Entry 66 exemption and hence are taxable at standard GST rates.
4. GST TDS Implication
• Under Section 51 of CGST Act, government entities (including government colleges) must deduct TDS @ 2% (1% CGST + 1% SGST) when making payments to suppliers if contract value exceeds ₹2.5 lakh.
• Since the trust is supplying taxable services to the college, GST TDS will apply on payments made to the trust.
• As per Notification 12/2017-CT (Rate), “educational institution” means one providing:
• Pre-school to higher secondary education, or
• Education as part of a curriculum for obtaining a qualification recognized by law, or
• Education as part of an approved vocational course.
• In your case, the government college qualifies as an educational institution since it awards degrees recognized by law.
2. Exemption under Entry 66
• Entry 66 exempts services provided by an educational institution to its students, faculty, and staff.
• Thus, the college’s service to students (collecting fees for recognized courses) is exempt.
3. Role of the Trust
• The trust is not directly imparting education to students under recognized law.
• Instead, it collaborates with the college and receives 70% of fees as consideration.
• This arrangement is viewed as the trust providing support services to the college (like faculty, infrastructure, or course management).
• Such services are not covered under Entry 66 exemption and hence are taxable at standard GST rates.
4. GST TDS Implication
• Under Section 51 of CGST Act, government entities (including government colleges) must deduct TDS @ 2% (1% CGST + 1% SGST) when making payments to suppliers if contract value exceeds ₹2.5 lakh.
• Since the trust is supplying taxable services to the college, GST TDS will apply on payments made to the trust.
03 December 2025
Here the trust registered under sec 12AA of incomerax act and primary objective is to develop education in the society. Can it be considered as an educational institution under the perspective of NN 12/2017?
03 December 2025
No. Recognization from department of education is mandatory.
03 December 2025
Ok.Thank you sir for your valuable suggestions.
03 December 2025
You are welcome.
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