RCM on affiliation fees paid to foreign educational institution

This query is : Resolved

RAVI VENKATRAMAN (Querist)
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22 July 2025 Hi All !
I work as a Finance Head in one of the education group. We were told that we are to remit GST on RCM basis for the affiliation fees that we pay to foreign educational institutions. As you are all aware, that the schools are exempt from GST and we do not have GST registration. Is this information that we received is correct and if so, without registration, how do we pay GST on such affiliation fees, under RCM?

Request your assistance.

Thanks !

Asha Kanta Sharma online

Asha Kanta Sharma online

(Expert)
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12 August 2025 1. Is GST applicable on affiliation fees paid to foreign educational institutions under RCM?
Yes, GST is applicable under Reverse Charge Mechanism (RCM) on services received from a foreign entity (import of services).
Affiliation fees paid to a foreign educational institution fall under import of service, attracting GST under RCM.
Even if your school’s educational services are exempt from GST, imported services are separately taxable under GST law.
2. What if the school is not GST registered?
If your school/group is not registered under GST, technically you are required to register under GST if you are liable to pay tax under RCM.
The law mandates that any person who is liable to pay GST under RCM must obtain GST registration, irrespective of turnover.
So, your education group must apply for GST registration solely for the purpose of paying GST under RCM on imported services like affiliation fees.
3. How to pay GST on RCM without registration?
You cannot pay GST on RCM without GST registration.
To comply, you must:
Obtain GST registration.
File GSTR-3B returns to report and pay GST on RCM.
Claim Input Tax Credit (ITC) if eligible (subject to restrictions).

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