GST on Coaching Class

As everyone is aware, GST has been made applicable in India from 1st July, 2017. Inspite of various attempts to educate the masses, by the Government, there has been lots of confusion regathe rding applicability of GST on various sectors. Education is the back bone of any economy and hence the same should not be taxed. Going through the same logic, the educational institution has been covered under GST at NIL rate. However, there has been confusion regarding levy of GST on services provided by the coaching class (Private Institution). In this article, we look at the applicability of GST on coaching class in detail. Know more about GST on educational services.

GST Notification

Sr. No. 66 of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017 provides that services rendered by an educational institutions will be taxed at NIL rate under GST. Relevant serial number 66 of notification no. 12/2017-Central Tax (Rate) of the said notification is summarized hereunder;

SL. No.	Heading	Description of service	Rate	Condition
66	Heading 9992	Services provided by an educational institution to its students, faculty and staff; and Services provided to an educational institution, by way of – (i) transportation of students, faculty and staff; (ii) Catering. The same includes any mid-day meals scheme provided by the central or state government or union territory; (iii) Security, cleaning or housekeeping services performed in the educational institution; (iv) services relating to the admission to, or services relating to the conduct of examination by, such institution; up to higher secondary; (v) supply of any online educational journals or periodicals; Provided that nothing contained in (i), (ii) and (iii) above shall apply to an educational institution other than an institution providing services (by way of pre-school education and education up to higher secondary school or equivalent.) Provided further that nothing contained in subitem (v) of item (b) shall apply to an institution providing services by way of,- (i) pre-school education and education up to higher secondary school or equivalent; or (ii) education as a part of an approved vocational education course.	NIL	NIL

In order to fall within the set criteria of notification no. 12/2017-Central Tax (Rate) dated 28.06.2017, i.e. applicable GST rate would be NIL only and only if the same is covered within the definition of an educational institution. Definition of an educational institution is provided under 2 (y) of the said notification.

Important Features That Can Be Summarized From The Definition Of Educational Institution Are –

Institution must be providing service by way of pre-school education and education upto higher secondary school or equivalent education;
Curriculum for obtaining the qualification must be recognized by the law as in force;
Education institution includes approved vocational education course.

Further, notification no. 11/2017 Central Tax (Rate) dated 28.06.2017, provides taxability of education services and the same is reproduced hereunder;

SL. No	Chapter, section, heading, group or service code (Tariff)	Description of service	Rate (Per cent.)	Condition
30	Heading 9992	Education services	9	-

Hence on the basis of both the above notifications, it is clear that services provided by educations services are taxable @9% under CGST and @9% under SGST, however, certain services are taxable at NIL rate and the same is provided under notification 12/2017-Central Tax (Rate). Going through both the above notification, the question that comes in the mind is whether the coaching classes providing teaching to the students and also providing coaching for various entrance examinations are liable to GST or the same can be held as covered under the notification no. 12/2017-Central Tax (Rate) and will be taxed at NIL rate?

Advance Ruling on Coaching Class

The said question was answered by the honourable Maharashtra Authority for Advance Ruling in the matter of Simple Rajendra Shukla and it was held by the advance ruling authority that Simple Shukla’s Tutorials is in no way covered within the definition of Educational Institution as given in the notification no. 12/2017-Central Tax (Rate). The reason behind non-coverage of coaching class within the definition of education institution, as provided by the advance ruling authority, is that such private institute does not have any specific curriculum and it does not conduct any examination or award any qualification recognized by any law and hence the same cannot be covered within the ambit of definition of educational institution and hence NIL rate of GST as provided under notification no. 12/2017-Central Tax (Rate) is not applicable. Since the activity of coaching class are ruled out of the ambit of notification 12/2017- Central Tax, GST would be payable by the coaching class / private institute as per rates specified under notification no. 11/2017 i.e. @9% under CGST Act and @9% under SGST Act.