Finance Ministry: GST will not make Education Expensive

After receiving criticism regarding the impacts of GST, the Finance Ministry addressed all the doubts regarding the exemption of education from the GST regime. The ministry has clarified that education will not be affected by the Goods and Services Tax (GST) rolled out on July 1.

Refuting the argument that education will become expensive, the Finance Ministry stated that there will be no change in any aspect of education under GST. The Ministry added that tax has been reduced on certain education items such as schools bags etc.

Check out all the education entities that are exempted from GST:

• From pre-school education to higher secondary education or its equivalent educational qualification recognised by any law that is in force at that time will be exempted from GST.
• Vocational courses approved by designated bodies will also be excluded from the GST slab.
• Transportation services for students, faculty and other staff services will also be exempted from GST for educational institution imparting pre-school education or education up to higher secondary.
• Catering services such as the mid-day meals scheme provided either by Union territory, State Government or Central Government will be exempted from GST (for primary to higher secondary level).
• Housekeeping, security or cleaning services performed in the type of educational institutions mentioned above will be excluded from the new tax regime.
• Admission and examination conducting services in these institutions will also be GST-free.

Also Read:UP Universities and Colleges to Introduce GST as part of Curriculum

The ministry also clarified that education up to Higher Secondary level will not be subjected to GST on any of the output services. It was also declared that most of the essential input services will be tax-free.

The input services that will come under GST are transport, canteen and other such services provided by private players. The Ministry also informed that these services were taxable even in the old tax system.

Also Read:Impacts of GST on the Education Sector. Check details here!

According Finance Ministry's press release, services provided by an entity registered under section 12AA of the Income-tax Act relating to the advancement of educational schemes and programmes by way of charitable activities for orphaned, abandoned or homeless children, traumatised individuals, mentally or physically abused persons, prisoners and persons over 65 years of age residing in a rural area will also be excused from GST.