Educational services have always been kept out of the ambit of taxation and following the earlier tax structures , GST regime too , has provided exemption to such services . However clear demarcation has been made between the services provided by the educational institutions and the services provided to such institutions . Whereas services provided by the educational institutions to its students , faculty and staff have been provided general exemption , the services provided to such institutions have not been provided general exemption . As a matter of fact exemption in such cases , is provided only in respect of specified institutions imparting education at pre-school level and upto higher secondary level and that too for the specific services only .
 
• Entry 66 of the Notification No. 12/2017 – Central Tax ( Rates) embodies following services as Nil Rated :
 
“Services provided –
(a) by an educational institution to its students , faculty and staff ;
(b) to an education institution , by way of –
(i) transportation of students , faculty and staff ;
(ii) catering , including any midday meals scheme sponsored by the Central Government , State Government or Union Territory ;
(iii) security or cleaning or house-keeping performed in such educational institution ;
(iv) services relating to admission to or conduct of examination by , such institution ; upto higher secondary ;
Provided that nothing contained in entry(b) shall apply to an educational institution other than an institution providing services by way of pre-school education and education upto higher secondary school or equivalent . “
 
• Before analyzing aforesaid entry it is pertinent to note that in the aforesaid Notification in the definition clauses (y) and (h) “educational institution” and ” approved vocational education course ” have been defined as under :
 
(y)”educational institution” means 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.
 
(iii) education as a part of an approved vocational education course . “
 
(h) “approved vocational education course” means ,-
(i) a course run by an industrial training institute or an industrial training centre affiliated to the National Council for Vocational Training or State Council for Vocational Training offering courses in designated trades notified under the Apprentices Act , 1961 ( 52 of 1961 ) ; or
 
(ii) a Modular Employable Skill Course , approved by the National Council of Vocational Training , run by a person registered with the Directorate General of Training , Ministry of Skill Development and Entrepreneurship ;”
 
• It is quite evident from the aforesaid definition of “educational institution” that it will include in its periphery following institutions :
(i) All those institutions which impart education pre-school education and also those educational institutions which impart education upto higher secondary school or equivalent “. This equivalent level shall include education upto 12th standard or education upto Intermediate Level as exists in the State of U.P. etc.
It is further clarified that pre-school education shall include the levels of play-school , Pre-nursary , Nursary , Day care centers , Kinder Garten , Pre-kinder Garten , Crèche etc. where children upto the age of six years are educated .
 
(ii) All those institutions which impart education as a part of a curriculam for obtaining a qualification recognized by any law for the time being in force. Now this clause embodies following three ingredients to be an educational institution :
(a) education must have been imparted as part of curriculum .
(b) such education must be for obtaining a qualification ( such as degree , diploma , certificate , etc. )
(c) such qualification must be recognized by any law for the time being in force. It is pertinent to note that any law for the time being in force signifies any law for the time being in force within the taxable territory of India .
 
It is pertinent to note that in India various universities , colleges , technical institutions etc. are imparting education by conducting various courses . There exist various enactments to govern the activities of such institutions and as such these are recognized by the existing laws. The Indian Universities Act , 1904 ; The Central Universities Act , 2009 ; The University Grants Commission Act , 1956 ; University Grants Commission ( Affiliation of Colleges by Universities ) (Ist Amendments) Regulations , 2012 ( Notified on 13th February , 2012 ) , The Institute of Technology Act , 1961 ( which governs all the Indian Institute of Technologies in India i.e. I.I.Ts. ) ,Technical Institutions (degree) Regulations , 2010 ; are some of the enactments which can be narrated in this respect. Thus all such institutions which are imparting education higher than the higher secondary level and providing qualification in the form of degree or diploma or certificate which are recognized by any law for the time being in force i.e. which are supported by some enactment of the State or the Central Government, shall fall within the ambit of this clause and the provisions of exemption shall apply to such institutions .
(iii) The institutions imparting education as a part of an approved vocational education course , shall also fall in the ambit of “educational institution” as defined aforesaid . Now it has been clarified by clause (h) of the aforesaid Notification no. 12 of 2017 that approved vocational education course shall mean –
(1) following courses –
(a) a course run by an industrial training institute or
(b) a course run by an industrial training centre affiliated to the National Council for Vocational Training or
(c) a course run by the State Council for Vocational Training offering courses in designated trades ,
notified under the Apprentices Act , 1961 ( 52 of 1961 ) .
Thus the all important ingredient of the aforesaid courses is that such courses must be notified under the Apprentices Act , 1965 .
 
(2) a Modular Employable Skill Course which is run by a person registered with the Directorate General of Training , Ministry of Skill Development and Entrepreneurship. Such course must be approved by the National Council of Vocational Training .
 
• Now coming back to clause (a) of the entry 66 of Notification 12 of 2017 , it is quite evident that “services provided by an educational institution to its students , faculty and staff shall enjoy exemption under the GST regime. ” Now following conclusions may be drawn from the aforesaid entry of exemption :
 
(1) The aforesaid entry envisages exemption to services by the educational institutions with the only condition that such services must be in relation to its students , faculty and staff . No periphery or ambit has been drawn to the kind of services in this entry , thus all kinds of services which have been provided by such educational institution to its students , faculty or staff shall enjoy exemption under this entry . It should also be borne in mind that it is not an inclusive or exclusive entry but it is a specific entry which is quite exhaustive.
 
(2) Thus following services provided by the educational institution shall enjoy exemption as they fall in the ambit of aforesaid entry –
 
(i) Education / tuition fee , examination fee , sports fee and development fee .
(ii) conveyance or transportation fee if the conveyance or transportation is provided by the institution itself to its students and staff members and is not through any agency or entity or on any contract basis .
(iii) hostel boarding and lodging fee if such services are provided by the educational institution itself and are not provided by any agency or entity or on any contract basis.
(iv) Mess fee , if such services are provided by the educational institution itself and are not provided by any agency or entity or on any contract basis .
(v) Library fee , if such services are provided by the educational institution itself and are not provided by any agency or entity or on any contract basis .
(vi) Fee to obtain duplicate degree in case the student has lost the original one .
(vii) Canteen services if such services are provided by the educational institution through its own staff and are not provided by any agency or entity or on any contract basis .
(viii) Services providing drinking water if such services are provided by the educational institution through its own staff and are not provided by any agency or entity or on any contract basis .
(ix) Parking services if such services are provided by the educational institution through its own staff and are not provided by any agency or entity or on any contract basis.
(x) Cleaning or house-keeping services if such services are provided by the educational institution through its own staff and are not provided by any agency or entity or on any contract basis .
(xi) Security services if such services are provided by the educational institution through its own staff and are not provided by any agency or entity or on any contract basis .
(xii) Placement services if such educational institution itself provides such placement to its students .
(xiii) All other services provided by the educational institution to its students , faculty or staff .
 
(3) The following services provided by an educational institution shall not enjoy exemption under the GST regime :
 
(i) the affiliation fee or charges claimed by any university from its affiliated colleges because such services are not of the nature of services provided to its students , faculty or staff .
(ii) conveyance or transportation fee if the conveyance or transportation is provided by the institution through any agency or entity or on any contract basis .
(iii) hostel boarding and lodging fee if such services are provided by the educational institution through any agency or entity or on any contract basis .
(iv) Mess fee , if such services are provided by the educational institution through any agency or entity or on any contract basis .
(v) Library fee , if such services are provided by the educational institution through any agency or entity or on any contract basis .
(vi) Canteen services if such services are provided by the educational institution through any agency or entity or on any contract basis .
(vii) Services providing drinking water if such services are provided by the educational institution through any agency or entity or on any contract basis .
(viii) Parking services if such services are provided by the educational institution through any agency or entity or on any contract basis.
(ix) Cleaning or house-keeping services if such services are provided by the educational institution through any agency or entity or on any contract basis .
(x) Security services if such services are provided by the educational institution through any agency or entity or on any contract basis .
(xi) Placement services if such educational institution provides such services through any agency or entity on behest of other institutions .
(xii) Education services which relate to education as part of a curriculum for obtaining a qualification not recognized by any law for the time being in force in taxable territory .
(xiii) Any other services provided by the educational institution through any agency or entity or on contract basis .
 
• It is pertinent to note that clause (b) of Entry 66 of the Notification 12 of 2017 envisages certain services which even if provided to the educational institutions of particular categories shall enjoy exemption in the GST regime . This clause entirely and squarely applies to the educational institutions which provide services by way of pre-school education and education upto higher secondary school or equivalent .
 
It envisages that following services if provided to the aforesaid educational institutions, will enjoy exemption in GST regime :
 
(i) services by way of transportation of students , faculty and staff ;
(ii) services by way of catering , including any midday meals scheme sponsored by the Central Government , State Government or Union Territory ;
(iii) services by way of security or cleaning or house-keeping performed in such educational institution ;
(iv) services by way of services relating to admission to or conduct of examination by , such institution ; upto higher secondary ;
 
It is pertinent to note that the aforesaid services may be provided by any agency or on contract basis to the aforesaid category of educational institutions . It is reiterated that such services to any educational institution , other than an educational institution providing services by way of pre-school education and education upto higher secondary school or equivalent, shall be taxable in the GST regime .
 
• It is also pertinent to note that entry 66 entirely and squarely relates to the educational institutions as defined in clause (y) of Notification No. 12 / 2017-Central tax (Rates) and any entity which does not satisfy the requisites for being an educational institution according to clause (y) as mentioned aforesaid , shall not get the benefit of exemption as envisaged by entry 66 of this Notification . Thus private coaching centres and training centres or tuitions or coaching by private individuals imparting education may not get any exemption under this entry because they do not fall in the category of educational institutions as envisaged by clause (y) .
 

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