Lok Sabha Question No. 2809 (UNSTARRED), answered on 2018-08-03
Subject: GST on Education
Ministry: FINANCE
Asked by: UDIT RAJ

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE *****

## LOK SABHA

## UNSTARRED QUESTION NO.2809

## TO BE ANSWERED ON FRIDAY THE 03 RD  AUGUST, 2018 SHRAVANA 12, 1940 (SAKA)

## GST ON EDUCATION

## 2809.  DR. UDIT RAJ:

Will the Minister of FINANCE be pleased to state:

- (a) whether the objective of the Government is to keep education out of the purview of Goods and Services Tax (GST) and if so, the details thereof;
- (b) whether the GST exemption has been extended to the level below higher education and any service provided by higher educational institutions attracts 18 per cent GST and if so, the details thereof; and
- (c) whether the Government has taken cognizance that countries such as Australia, South Africa, etc. have exempted tax on higher education and if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI SHIV PRATAP SHUKLA)

(a): Exemption  in  respect  of  services  provided  by  an  educational  institution  as  existed  in  the Service  Tax  regime  have  been  carried  forward  in  GST  regime.  Apart  from  that,  few  more services provided by and provided to an educational institution have also been exempt from GST subsequently based on representations received from stakeholders.

(b): No, Sir. Services provided by an educational institution to its students, faculty and staff are exempt from GST.

Educational institution has been defined under GST exemption notification to mean an institution providing services by way of

- (i) Pre-school education and education upto higher secondary school or equivalent,
- (ii) Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force, and (iii) Education as part of an approved vocational course.

Thus,  there  is  no  differential  treatment  of  GST  exemption  for  pre-  school  education,  higher secondary education and higher education.

(c): GST  or  VAT  on  education  in  countries  such  as  Australia,  South  Africa,  etc.,  are  not completely exempted. In India we have given overarching exemption to courses or degrees that are  recognized  by  Indian  Law.  In  Australia,  they  have  qualified  each  and  every  courses  and exemption  available  to  such  courses.Under  South  Africa  VAT  Law  Educational  Services rendered by the state or qualifying institutions is exempt from VAT and at the same time no input tax credit can be claimed by the supplier of such service.

GST being an indirect tax and a value added tax, the ultimate burden of the tax falls on the end consumer. However, Government has made an attempt to keep the cost of education as low  as  possible  by  exempting  GST  on  all  output  supplies  by  educational  institutions  to  its students,  faculty  and  staff  from  GST.  Similarly,  under  Australia  GST  and  South  Africa  VAT, education  is  not  completely  zero  rated,  meaning  thereby  certain  input  services  in  relation  to supply of educational service are taxable. Tax exemptions being in the nature of tax expenditures are an indirect subsidy to preferred tax payers and are decided by the Government based on the existing socio- economic conditions prevalent in the country.

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