What is the GST rate for commercial training and coaching?
Goods and Services Tax or GST is an indirect tax or consumption tax used in India for the supply of goods and services.
GST will have an impact on each and every industry and business in India. In the field of education and training, India occupies an important place in the global education sector.
There are more than 1.4 million schools in the country, and it has more than 227 million students enrolled and more than 36,000 higher education institutions. India has one of the largest higher education systems in the world. However, there is still much potential for further development in the education system. India has become the second largest market for e-learning after the US.
• Rate tariff of GST for coaching classes with issuance of certificate service? Any of the GST certification services offer training courses without a certification service fall under the GST exemption list? What are goods and service tax slab rate tutorial classes without providing certificate service?
Commercial training or training center is any establishment or institute that provides commercial training or coaching to provide skills or knowledge or lessons in any subject or field other than sports.
These includes coaching or tutorial classes with and without issuing a certificate, but it doesn’t include the preschool coaching and training center, or any institution or establishment that offers any certificate or diploma or degree or any educational qualification recognized by law for the time being in force.
Some of the categories under Institute that providing commercial coaching are exempted from paying GST. You can check out the list of exempt business category services offered by GST authorities under the GST exemption category under the coaching for lessons service.
GST on education services is nil, but input tax cost concerns remain
Accordingly, the services offered by an educational institution and the recommended courses offered by IIM are exemption under GST. Specific services received by the educational institution involved in pre-school education and higher secondary education are also exempted.
While these exemptions will encourage the education sector, these institutions will still bear the GST burden on some inputs such as renting, telecommunications, event-related expenses, and purchase of goods etc. These supplies will still be the input tax cost for educational institutions. This sector does look forward to a GST exemption for all expenditures.
There is also another area of concern in the sector of education and training. What it does mean is the taxability of educational events organized by a foreign-based entity in India.
Accordingly, these foreign entities are organizing educational training events in India. Individuals, participants from business entities and overseas participants are participating in this and would become liable to GST.
When you look at the current service tax exemptions extended in GST, it appears that services received from a service provider located in an area of non-taxable by an individual in relation to any purpose other than commerce, industry or any other business or profession would also be exempt. In view of this exemption, one may assume that training events attended by individuals organized by a foreign entity in India are exempted from the GST.
The industry of education and training will now have to closely watch GST developments and will look forward to subsequent exemptions and clarifications.