GST Exemption on Educational Institutions

Before we embark on the exemption entries, it would be pertinent to understand the meaning of "educational institution". In simple terms, it comprises:

• pre-schools;
• schools providing education up to higher secondary or equivalent;
• institution providing education for obtaining a qualification recognised by law (for example, Bachelor of Commerce degree conferred by the University of Madras);
• institution providing an approved vocational education course.

While the first three categories are popular, the fourth category needs understanding. Approved vocational education course is defined to mean:

• a course run by an industrial training institute or an industrial training centre, wherein:
  • such institute / centre should be affiliated to the National Council for Vocational Training / State Council for Vocational Training;
  • such institute / centre should offer courses in designated trades notified under the Apprentices Act, 1961;
• a Modular Employable Skill Course, wherein:
  • such course should be approved by the National Council of Vocational Training;
  • such course should be run by a person registered with the Directorate General of Training, Ministry of Skill Development and  Entrepreneurship.

Note 1 - The entry exempts any service by an educational institution to its students. A point to ponder is the taxability of application fee collected by an educational institution prior to admission. It should be noted that the candidate (who has paid the application fee) is not a student (but a candidate / prospective student) on the date of receipt of such fee.