Is Education Sector Really Exempted from GST?

The Government of India has rolled out the Goods and Service Tax (GST) and most of us are wondering how it is going to affect our daily expenses. While the government has announced that Education and Healthcare have been exempted from GST, there are some loopholes in this rule as well.

If you are thinking that the education in India will be GST-free, you could be rather mistaken. There are various educational programmes for which GST will be applied including coaching classes as well as certificate courses. Find out how GST will impact education below:

GST for Tutorials and Coaching Classes for Competitive Exam:

• GST will not be applicable on school and college fees.
• Under GST, parents will have to pay 18% tax on the coaching classes provided by various coaching centres.
• As a result, coaching fees will rise up to Rs. 1.5 lakh per annum.
• Earlier, the service tax charged by coaching classes was 15% which has now been raised to 18% under GST.

Director of IIT Prakashan, Durgesh Mangeshkar, said that the government is not considering coaching classes under the regular education schemes. He also stated that coaching classes are considered to be a luxury service by many, therefore, GST has been applied on coaching classes.

He also added that this will highly impact the parents as they will have to spend a lot of extra money to help their children prepare for competitive exams.

MD of Prime Academy, Lalit Kumar, said that a rise of 3% in taxes is a huge burden on parents who are paying for their children’s coaching classes. He also added that sometimes this cost is paid by the institutes for students from the weaker sections of the society.

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GST for Certificate Programmes and Professional Courses:

• Traditional courses and programmes approved by government-recognised bodies have been exempted from tax net.
• Under GST, taxes on non-conventional and certificate programmes will go up.
• Foreign language courses, certificate courses, etc. will be more expensive as 4% tax will be increased after GST.
• There will be no major change in the fees from 2017, however, the fees will be revised again in 2018.
• The general education expenses at colleges for stationery, housekeeping staff, transport, security services, etc. will also increase.

GST’s Impact on Cost of Living for Students:

Although the fees for college education will remain the same, the cost of living, transportation, food cost and rent will be majorly affected by GST. It becomes more difficult for students who live off-campus and have to give both rent and dining expenses.

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GST, although exempts education, will increase much of the educational expenses that students have to face while they are enrolled for higher education.