The government has earned Rs 4792.40 crore from taxing education services through GST in FY 2023-24

Government earned GST of Rs 4,792 crore on education services in FY24; only these services are exempt

Pankaj Chaudhary, minister of state in the ministry of finance said in Lok Sabha on November 25, 2024, that the government collected Rs 4792.4 crores as Goods and Services Tax (GST) on education services which are not exempt under GST in FY 2023-24. The Service Accounting Code (SAC) for this is 9992 on which 18% GST rate is levied.

How much money has the government earned from imposing GST on educational services

The Minister answering a query raised by Dr. D Ravi Kumar said: The data for GST collected on education services, which are not exempted, such as commercial training and coaching, for the past three years is tabulated below:

Lok Sabha GST

Only these education services are exempt from GST; As recommended by GST council

The Minister answering a query raised by Dr. D Ravi Kumar said: GST rates and exemptions are prescribed on the basis of the recommendations of the GST Council, which is a constitutional body comprising of members from both the Union and State/UT Governments.

"Services provided by educational institutions to its students, faculty, and staff are exempt from GST. 'Educational institution' has been defined under GST exemption notification to mean an institution providing services by way of:
(i) pre-school education and education up to higher secondary school or equivalent;

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(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.

Furthermore, supply of services relating to admission or conduct of examination by educational institutions are exempt from GST.

Additionally, the following services provided to schools, up to higher secondary, are also exempt:
(i) transportation of students, faculty and staff;
(ii) catering, including mid-day meals sponsored by the government;
(iii) security or cleaning or housekeeping services.

Services of affiliation provided by a Central or State Educational Board or Council or any other similar body, by whatever name called, to Government schools have been given exemption from GST w.e.f. 10.10.2024 as recommended by GST Council in its 54th meeting.

These educational services attract GST

Other than the above exempted education services, the services such as commercial training and coaching services attract 18% GST rate. Printed books including Braille books, Newspapers, journals and periodicals, whether or not illustrated or containing advertising material, and Children's picture, drawing or coloring books attract Nil GST rate. The fee charged for issuance of migration certificates and duplicate certificates by educational institutions to its students is exempt from GST.

Unlikely that these services will get any GST relief in near future

When asked whether the government aims to exempt the other education services which are currently subject to GST, the minister said: "GST rates and exemptions are prescribed on the basis of the recommendations of the GST Council, which is a Constitutional body comprising of members from both the Union and State/UT Governments. Details of exemptions from GST on education-related services have been given above. Currently there is no recommendation from the GST Council for further exemption in this regard."

Chartered Accountant Ashish Niraj, Partner, A S N & Company, who has also handled Special Audit under GST, says: "By Exempting Core Educational Services provided by educational institutions government is fulfilling its constitutional obligation of providing free and compulsory elementary education to every child. However, it's a fact that in today era there is vast level of commercialization of educational activity by various institutions. To Keep a balance between both Government has made GST Exempt on certain education services which are deemed part of core education activity, and other than those exempt education services the services such as commercial training and coaching services attract 18% GST. Education Institutions are also defined in GST so that there is not any ambiguity. The government keeps getting representations to include various services related to education in exempted categories, decisions on which in taken by GST Council."

This story originally appeared on: India Times - Author:Faqs of Insurances