A coaching class which helps students to prepare for various engineering and medical exams is not exempted from the Good and Services Tax (GST). As per the rules are given by the Maharashtra Authority for Advance Rulings (AAR). Hence, Coaching Classes to Pay 18% GST.
Rajendra Shukla who is the owner of the Borivali-based Simple Shukla Tutorials searched for a decision in order to determine whether offering coaching to students of Classes of XI and XII to provide guidance for entrance exam such as medical and engineering would be subject to GST.
According to the command, it is neccessary on the taxpayer who has given the decision and government authorities, to provide important details in order to avoid the future issue. Later, Shukla in his application stated that the government notification (Notification 12, dated June 28, 2017) said that the services offered by the educational institution to the students would be taxed at “nil” rate. He further said that the terms “Education” and “Institution” had not been given under the GST Act.
In general, it simply means that any organization who provides educational services. Hence, his coaching class is exempted from GST.
But, AAR committee noted that this notification namely defined which educational institutions which will be exempted from GST. The list covered all the schools which provide primary and higher secondary education and also institutions which provide vocational educational courses.
The list of exemption notification also covered educational institutions whose curriculum resulted in students obtaining a qualification offered by law. The AAR bench pointed out the coaching class doesn’t follow any specific curriculum and did not conduct any examination or award any qualification recognized by law.
“The activity of the applicant is not covered by the specific definition provided for interpretation of the exemption notification” finished by AAR.
As per the tax experts, all the coaching classes whose turnover is above have to register under GST and have to add 18% to their fees. In simple words. GST will have to be paid by students. Later, Vinay Kumar, MD, Rao IIT Academy said that the 18% GST is not only painful for students but also for them.
He further said, “GST was applicable from July last year and it increased the total fees to some extent”. Narendra Bhambhani working in the Maharashtra Class Owners Association said a parent whose child is studying for coaching class for just a period of 5 years from the staring of school has to pay Rs 1 lakh even if the fees change adequately.
Hence, coaching classes to pay 18% GST, due to which students will face pain.