Coaching classes not exempt from GST, 18% tax applicable on fees, clarifies government

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Updated: May 7, 2018 1:29:29 PM

Coaching centres are not exempt from the Goods and Services Tax (GST) even as some educational services bear 'nil' tax, the government has clarified.

Coaching classes not exempt from GST, 18% tax applicable on feesCoaching centres are not exempt from the Goods and Services Tax. (Image: PTI)

Coaching centres are not exempt from the Goods and Services Tax (GST) even as some educational services bear ‘nil’ tax, the government has clarified. 18% GST will be applicable on fees of coaching classes, a ruling by the Maharashtra Authority for Advance Rulings (AAR) said, TOI reported. A Mumbai-based coaching institute had moved state AAR seeking clarification if GST was applicable on coaching fees.

As services rendered by education institutes are taxed at ‘nil’ rate, Borivili-based Simple Shukla Tutorials had said that the coaching institute should not be subject to GST, the newspaper reported. The AAR ruled that 18% GST is applicable on coaching fees. It clarified that only those educational institutes that provide pre-school education, higher secondary education and vocational training are covered under nil tax.

The Central Board of Excise and Customs had earlier stated that private coaching centres or other unrecognized institutions self-styled as educational institutions, would not be treated as educational institutions under GST and thus cannot avail exemptions. “Training given by private coaching institutes would not be covered as such training does not lead to the grant of a recognized qualification,” CBEC had said.

The government dully exempted core education services from the GST while levied 18% tax on other education services with “full admissibility” of Input Tax Credit (ITC) for such taxable services. Beyond education services provided by private players, some of the input services like canteen, repairs and maintenance continue to be taxed under GST as was during pre-GST era.

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