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LoansJagat Team

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16 Jul 2025

GST on Education – What’s Taxable and What’s Exempt?

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For her MBA, Anushka was accepted to a private university. The yearly tuition charge is ₹2,00,000. The 18% GST on the fee, however, shocked her.
 

  • Tuition Fee (2 years): ₹4,00,000
  • GST @18%: ₹72,000
  • Total Payable: ₹4,72,000

She hadn’t expected to pay nearly ₹75,000 extra just in tax.

According to GST Notification No. 11/2017-Central Tax (Rate), private institutions' higher education is not free from GST, but school education is. The tax that was meant to "simplify" the system made Anushka's dream seem less possible.

GST on Education Services: An Overview


In India, the Goods and Services Tax (GST) framework distinguishes between educational services that are exempt from tax and those that are taxable, based on the nature of the service provided.
 

Category

Service Description

GST Rate

Example

Exempt Services

Education from pre-school to higher secondary

0%

Schools affilia

ted with recognised boards

 

Education leading to a qualification recognised by law

0%

Degrees from UGC-recognised universities

 

Approved vocational education courses

0%

Courses approved by NCVT/AICTE

 

Services by institutions to students, staff, or faculty

0%

Includes transport, catering, housekeeping, admission & examination services.

Taxable Services

Commercial coaching and training centres

18%

Private coaching for JEE/NEET, etc. – ₹50,000 course + ₹9,000 GST = ₹59,000 total

 

Private tuition and tutorials

18%

Not affiliated with a recognised curriculum

 

Online courses (non-degree granting)

18%

E-learning platforms providing skill development or certifications

 

Vocational courses are not recognised by the government.

18%

Courses by private institutes without NCVT/AICTE approval


What Education Services Are Taxable?

In India, the Goods and Services Tax (GST) applies an 18% tax rate to certain educational services that are not exempt under GST laws. These services are classified under the Service Accounting Code (SAC) 9992.
 

Type of Educational Service

Taxability

GST Rate

Example

Private Coaching/Tuition

Taxable

18%

Coaching for NEET at ₹60,000 + ₹10,800 GST = ₹70,800 total

Vocational Training (non-recognised)

Taxable

18%

Graphic design course by private firm at ₹40,000 + ₹7,200 GST = ₹47,200

E-learning Platforms (non-degree)

Taxable

18%

Online Python course at ₹10,000 + ₹1,800 GST = ₹11,800

Distance Education (non-UGC/AICTE)

Taxable

18%

Private MBA correspondence course at ₹50,000 + ₹9,000 GST = ₹59,000

Hostel/Boarding (by private body)

Taxable

18%

Hostel charges ₹5,000/month → ₹60,000/year + ₹10,800 GST = ₹70,800

Placement Services

Taxable

18%

Placement service fee ₹20,000 + ₹3,600 GST = ₹23,600

 

Note: GST is applicable only when these services are provided by entities not falling under the category of "educational institutions" as defined under GST Notification No. 12/2017-Central Tax (Rate).

Exemptions Under GST for Educational Services

The following services are exempt from GST under Entry 66 of the notification:

 

  • Educational Services Provided by Educational Institutions: Services rendered by an educational institution to its students, faculty, and staff are exempt from GST.
  • Conduct of Entrance Examinations: Services provided by an educational institution in conducting entrance examinations against consideration in the form of entrance fees are exempt.
     
  • Ancillary Services Provided by Educational Institutions: Services such as transportation, catering (including mid-day meals), security, cleaning, or housekeeping services performed in educational institutions are exempt, provided the institution offers preschool education and education up to higher secondary school or equivalent.

Example: School Admission Process

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Consider a scenario where a student is seeking admission to a recognised school:
 

  • Admission Fee: ₹10,000
  • Entrance Examination Fee: ₹500
  • Application Fee: ₹200
  • Issuance of Eligibility Certificate: ₹100
  • Issuance of Migration Certificate: ₹300

In this case, all the above fees are exempt from GST as they pertain to services provided by an educational institution to its students. The exemption applies to admission, entrance examination, application, eligibility certificate issuance, and migration certificate issuance.

Important Considerations
 

  • Definition of Educational Institution: An educational institution is defined as an institution providing services by way of pre-school education and education up to higher secondary school or equivalent; education as part of a curriculum for obtaining a qualification recognised by any law for the time being in force; or education as part of an approved vocational education course.
     
  • Exemption Scope: The exemptions apply only to services provided by educational institutions that meet the above definition.

Recent Developments and Exemptions
 

Category

Recent Change / Clarification

GST Status

Conditions

Example

Hostel Accommodation

Exempt if charges ≤ ₹20,000/month and stay ≥ 90 days (AAR Maharashtra)

Exempt

Private or institutional hostels; continuous stay of 90+ days

₹18,000/month for 10 months → ₹1,80,000 → GST = ₹0

R&D Grants to Educational Institutes

GST exemption on grants from government or private entities (effective Oct 10, 2024)

Exempt

Applicable to recognised institutions only

₹50 lakh grant to IIT for AI research → GST = ₹0

Skill Development Training

GST exemption reinstated from Jan 16, 2025, for NSDC/NCVET-affiliated programs

Exempt

Must be aligned with NSQF and recognised by NCVET

₹25,000 vocational courses via NSDC partner → GST = ₹0

Short-Term Hostel for New Students

Clarified that short-stay (1–2 months) for new students during vacation is not exempt

Taxable

Less than 90 days stay, not under academic session

₹10,000 for 1-month short stay → GST @18% = ₹1,800


Implications for Students and Educational Institutions

Implications for Students:
 

  1. Higher Education Cost Increase: Private colleges and deemed universities charge 18% GST on tuition and other fees if not exempt.
     Example:
    • Tuition Fee: ₹1,00,000
    • GST @18%: ₹18,000
    • Total Payable: ₹1,18,000
  2. Coaching and Skill Courses: Students preparing for competitive exams (like JEE/NEET) through private coaching centres pay 18% GST.
     Example:
    • Coaching Fee: ₹60,000
    • GST @18%: ₹10,800
    • Total Cost: ₹70,800
  3. Online Learning Burden: Online certifications and non-degree programs attract GST, making e-learning less affordable for some.
    Also Read  Take Education Loan in India
     

Implications for Educational Institutions:

  • Operational Cost Rise: GST is applicable on ancillary services such as transport, catering, and hostel (if not exempt), increasing operational expenses.
     
  • Compliance and Filing: Institutions providing taxable services must register for GST, file returns, and maintain tax compliance, adding administrative overhead.
     
  • Limited Input Tax Credit (ITC): Most educational institutions (especially exempt ones) cannot claim ITC on GST paid for input services like IT, maintenance, etc., increasing effective costs.

Note:
 

  • Students face increased costs for higher education, coaching, and skill development programs due to the 18% GST.
  • Institutions bear administrative and financial burdens unless fully exempt.
     
  • The GST framework, while promoting tax uniformity, requires careful policy balance to ensure education remains accessible and affordable.

Conclusion

By imposing private coaching and higher education while exempting basic educational services, the GST on education strikes a balance between tax income and social welfare, which affects the expenses for both students and institutions.

Faqs

Q. Is GST applicable on school tuition fees?

No, tuition fees up to higher secondary level are exempt from GST.

Q. Do coaching classes attract GST?

Yes, private coaching classes for competitive exams attract 18% GST.

Q. Is GST charged on hostel accommodation?

Hostel accommodation is exempt if charges are ≤ ₹20,000/month and the stay is 90 days or more.

Q. Are online education services taxable under GST?

Yes, GST applies to many online courses unless provided by recognised institutions.
 

Other Important GST Pages

GST on AC

GST on Air Tickets

GST on Atta

GST on Banquet Hall

GST on Bikes

GST on Bread

GST on Building Materials

GST on Cab Service

GST on Cake

GST on Catering Services

GST on Chocolate

GST on Commission

GST on Commercial Rent

GST on Commercial Property

GST on Courier Services

GST on Diamond

GST on Education

GST on Electric Vehicles

GST on Electronics

GST on Exports

GST on Fabrics

GST on Fertilizer

GST on Flight Tickets

GST on Furniture

GST on Gold

GST on Hotels

GST on Ice Cream

GST on Import of Services

GST on Insurance

GST on iPhone

GST on Jaggery

GST on Jewellery

GST on Labour Charges

GST on Land Purchase

GST on LIC Premium

 

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