GST Implications on Educational Institutions

INTRODUCTION

Education has long been hailed as the great equaliser—the ladder that lets ambitious minds climb to success. But in India, that ladder is getting steeper and pricier. With education costs skyrocketing, quality education has become less accessible for many. Recently, the CEO of a large asset management company shared that the academic expenditure of one child could amount to ₹10 crores in 16 years from now.

Does Goods and Services Tax (GST) on educational services add fuel to the fire? In this article, we break down the impact of GST on educational services, explore its implications for students and institutions alike, and ask the burning question: Should education really be taxed?

Educational activities by schools or colleges have been generally exempted from indirect tax. The term “education” is not defined under the CGST Act 2017 or even under the Constitution of India. But the flyer by the GST Council also refers to the Apex Court decision in Loka Shikshana Trust vs. CIT,¹ wherein it was noted that education is a process of training and developing knowledge, skills and character of students by normal schooling.

1 CIT [1976] 1 SCC 25

But before delving into the interpretation nuances of the exemption, it is imperat