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Impacts of Goods and Service Tax on Education Sector

Impacts of Goods and Service Tax on Education Sector

the Nodal Officer, Goods and Services Tax Network (‘GSTN’)
Impact of GST on Education sector
Education every sense is one of the fundamental factor for the growth. To promote maximum advancement, the Government has provided tax relief for the education sectors as of now.Education is a major factor for any economy, the quality of which, determines its future. It has been a fundamental right since the Right of Children to Free and Compulsory Education Act was passed by the Parliament in 2009.
Educational services’ have been defined in the said Schedule IV which means services by way of –
(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 recognized by any law for the time being in force; or
(iii) Education as a part of an approved vocational education course.
Hence, the exemption may be restricted to activities or transactions done by Central Government, State Government or any Local Authority.
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According to GST registration online in India, it is assumed that GST will impact education sector on both ways, positively and negatively.

  • The tax rate is likely to get raised by 3-5% because GST expected rate may levy around 18-20%. If government considers coaching an essential service, people can expect lower GST on such services.
  • Government’s concern is there in the valuation of coaching services in terms of their practice of scholarship, concession, and discounts. The valuation rule proposed is different from existing law. Coaching and training centers will need to frame appropriate policy and make documentation of such discounts.
  • Registration in each state is compulsory for such service providers who have central registration. Either through the own account or franchise agent, it is mandatory to register in every state in which they are operating.
  • Proper procedure will be mandatory for all receipts and invoices towards outward and inward supplies. Same should be uploaded in the system as prescribed.
  • Filing of numbers of returns and its frequency may go up
  • GST audit is provisioned if turnover is above 1 crore
  • Positive impact on the procedure for taking credit of input taxes. It will become easy and seamless.

Therefore, the Government did not want to radicalise the entire system in the first season of levying GST and wanted to have ‘a smooth landing’. However, there might be plans for modifications or changes in the offing. We can hope that given the importance of education in our society, the Government will implement appropriate measures to make education at all levels the least burdened and adopt a comprehensive and democratic approach to make the benefits of education available for all.