In a counter to all speculations that education will become more expensive due to the implementation of GST, the Central government strongly denied any such possibility. It is made clear that the education sector is neatly exempted from the Goods and Sales Tax. Although, there will be some tax reduction in a few items like school bags, etc.
A report also suggests a high possibility of services provided by an educational institution to students, faculty, and staff being exempted:
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force;
(iii) education as an essential for an approved vocational education course.
From faculty and staff services to transportation provided by an educational institution (providing pre-school education and education up to higher secondary school or equivalent) are safe from GST. Catering, too, is exempted from GST. This includes 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. Furthermore, services provided by such education institutions like that of security or cleaning or housekeeping services are also free from GST. Admission by institutions up to higher secondary is also liberated from the regime of GST.
With the enlistment above, it can be concluded that the sector up to the higher secondary level will not suffer due to GST on output services and much of the important input services.Input services like transport, canteen etc. provided by private players in the field were subject to service tax in the pre-GST era and the same is continued in GST regime.
Holding much importance, the section 12AA services by an entity from the Income Tax Act by the act of charity for the advancement of educational programmes or skill development for those who are physically or mentally abused and traumatised persons, for helpless and homeless children, for prisoners and for senior citizens in the rural India.
With much clarity provided, it can hence be concluded that GST has not brought any change in the taxability of educational and other services.
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