The Finance Ministry on Friday clarified that education will not become expensive under the newly rolled out Goods and Services Tax (GST) on July 1. The ministry, according to news agency ANI, stated, “(We) Deny reports that education will become expensive under GST. These are completely unsubstantiated.”
The ministry stated there is no change made on any subject relating to education in the GST era, except to reduce the tax rate on certain items of education including school bags etc. According to a statement put out by the Ministry of Finance, pre-school education and education up to higher secondary school or equivalent education as part of a curriculum for obtaining a qualification recognised by any law for the time being in force and approved vocational education courses, are exempt under GST.
“Transportation of students, faculty and staff services provided to an educational institution (providing pre-school education and education up to higher secondary school or equivalent) are exempt from GST. Similarly, catering, including any mid-day meals scheme sponsored by the Central Government, State Government or Union territory, to an educational institution providing education up to higher secondary school or equivalent, are also exempt from GST. Further, security or cleaning or housekeeping services performed in such educational institutions are also exempt from GST. Finally, services relating to admission to, or conducting of examination by, such institutions, upto higher secondary, too are exempt from GST,” the statement said.
The ministry further said that education up to Higher Secondary School level does not suffer GST on output services and also on most of the important input services. Some of the input services like transport, canteen etc. provided by private players to educational institutions were subject to service tax in pre-GST era and the same is continued in GST regime.
“Services by an entity registered under section 12AA of the Income-tax Act by way of charitable activities relating to advancement of educational programmes or skill development for — abandoned, orphaned or homeless children, physically or mentally abused and traumatized persons, prisoners and persons over the age of 65 years residing in a rural area are also exempt from GST,” the statement added. The new tax regime was introduced by the Narendra Modi government across the country, which subsumes a range of state and central taxes.