The Institute of Chartered Accountants of India (ICAI), through its GST & Indirect Taxes Committee, has released the GST Sectoral Guide on Education and Training Services – September 2026, providing comprehensive guidance on the applicability of Goods and Services Tax (GST) to schools, colleges, universities, coaching institutes, vocational training centres, educational technology (EdTech) platforms and allied educational services.
The publication, forming part of ICAI’s Industry-Specific GST Publication Series, analyses the relevant statutory provisions, exemption notifications, CBIC circulars, judicial pronouncements, advance rulings and emerging compliance challenges affecting the education and training sector.
The Guide particularly highlights the distinction between GST-exempt recognised education and taxable commercial coaching, alongside important developments concerning affiliation fees, examination services, skill development programmes, hostel accommodation, input tax credit and online education.
GST Exemption for Recognised Educational Institutions under Notification No. 12/2017-Central Tax (Rate)
Under Entry No. 66 of Notification No. 12/2017-Central Tax (Rate), dated June 28, 2017, services provided by an eligible educational institution to its students, faculty and staff are exempt from GST.
For this purpose, the definition of an educational institution under Paragraph 2(y) covers institutions providing pre-school education and education up to higher secondary level or equivalent, education forming part of a curriculum for obtaining a qualification recognised by law, and education forming part of an approved vocational education course.
Accordingly, tuition and other qualifying educational services provided by recognised schools, colleges and universities are generally exempt from GST. The benefit depends upon the prescribed statutory conditions and not merely on whether an institution is Government-owned, privately managed or operated by a charitable organisation.
GST Exemption on Admission Fees, Examination Fees, Hostel and Mess Services
The Guide explains that Circular No. 177/09/2022-TRU, dated August 3, 2022, clarifies the exemption available for admission-related services provided by eligible educational institutions, including application fees for entrance examinations, fees for eligibility certificates and migration certificates issued to existing or former students.
Further, under Entry No. 66(a) of Notification No. 12/2017-Central Tax (Rate), hostel accommodation, boarding facilities and mess or canteen services directly provided by eligible educational institutions to their students, faculty and staff are generally covered by the exemption.
However, where such services are outsourced, the tax treatment may differ. Circular No. 28/02/2018-GST, dated January 8, 2018, read with its corrigendum dated January 18, 2018, and Circular No. 85/04/2019-GST, dated January 1, 2019, clarify the treatment of food and catering services, including the applicability of 5% GST to specified outsourced catering supplies under Notification No. 11/2017-Central Tax (Rate), as amended by Notification No. 46/2017-Central Tax (Rate).
Transport, Catering, Security and Housekeeping Services: Exemption Restricted to Schools
An important distinction has been highlighted under Entry No. 66(b) of Notification No. 12/2017-Central Tax (Rate) concerning services supplied by third-party service providers to educational institutions.
Services relating to the transportation of students, faculty and staff; catering, including mid-day meals; and security, cleaning or housekeeping are exempt when provided to eligible institutions imparting pre-school education or education up to higher secondary level or equivalent.
However, the corresponding exemption does not extend to these services when supplied to colleges, universities and other higher educational institutions.
The Guide further clarifies that services relating to admission or conduct of examinations received by eligible educational institutions enjoy a separate exemption, while supplies of online educational journals and periodicals are exempt for specified higher educational institutions, subject to the conditions in the notification.
GST Exemption for Examination Boards and Government Testing Agencies
The scope of exemptions for examination-related services has been expanded through Notification No. 14/2018-Central Tax (Rate), dated July 26, 2018, effective July 27, 2018, and Notification No. 01/2023-Central Tax (Rate), dated February 28, 2023, effective March 1, 2023.
These amendments recognise Central and State Educational Boards as educational institutions for the limited purpose of conducting examinations and extend the specified treatment to Government-established authorities, Boards or bodies, including agencies conducting entrance examinations for admission to educational institutions.
Circular No. 151/07/2021-GST, dated June 17, 2021, clarifies that examination-related services supplied by eligible Boards, including entrance examinations, are exempt. Specified input services relating to the admission or examination process also enjoy exemption. However, independent accreditation and other taxable regulatory services remain outside the scope of this exemption.
GST Exemption on Affiliation Services to Government Schools under Notification No. 08/2024
A significant amendment was introduced through Notification No. 08/2024-Central Tax (Rate), dated October 8, 2024, effective October 10, 2024, inserting Entry No. 66A into Notification No. 12/2017-Central Tax (Rate).
The entry provides a specific exemption for affiliation services supplied by Central or State Educational Boards or similar bodies to Government schools.
However, the exemption does not extend to affiliation services provided to private schools, colleges, universities or other higher educational institutions.
The Guide emphasises that eligibility for affiliation-related GST exemption must be determined strictly in accordance with the scope and conditions of the relevant notification.
GST on University Affiliation Fees Remains a Major Litigation Issue
The taxability of affiliation fees charged by universities to affiliated colleges continues to be one of the most contentious issues under GST.
CBIC Circular No. 234/28/2024-GST, dated October 11, 2024, clarifies that affiliation services supplied by universities to colleges are regulatory in nature and are distinct from services relating to admission or the conduct of examinations. Accordingly, the circular takes the position that such affiliation services attract 18% GST.
However, the Guide discusses divergent judicial decisions on the matter. While the Madras High Court has upheld the taxability of affiliation fees in relevant cases, certain other High Courts have adopted a favourable interpretation for statutory universities, particularly where affiliation activities are performed pursuant to statutory obligations.
The September 2026 Guide consequently identifies university affiliation fees as an unsettled legal issue requiring careful consideration of the applicable judicial precedents, jurisdiction and contractual or statutory framework.
Commercial Coaching, Competitive Examination Training and EdTech Generally Attract 18% GST
The Guide highlights that private coaching centres conducting classes for competitive examinations such as UPSC, NEET, JEE, CA, CS and CMA generally do not qualify as educational institutions under the statutory definition merely because they impart education or training.
Consequently, commercial coaching and test-preparation services are ordinarily taxable at 18% GST under SAC 999293, while other taxable education and training services may fall under SAC 999294.
Similarly, online educational platforms, subscription-based learning services, professional training programmes and short-term executive education courses that do not lead to a qualification recognised by law generally remain taxable at 18%, subject to applicable exemptions.
The Guide also explains that recognised degree programmes offered by institutions such as the Indian Institutes of Management may qualify for exemption under Entry No. 66, whereas short-term executive development or participation-certificate programmes require separate examination.
GST Relief for Approved Vocational and Skill Development Programmes
Under Entries No. 69, 70 and 71 of Notification No. 12/2017-Central Tax (Rate), specified skill development, vocational training and assessment services are exempt from GST, subject to prescribed recognition, certification and scheme-related conditions.
Notification No. 08/2024-Central Tax (Rate), dated October 8, 2024, amended the exemption framework, effective October 10, 2024, to align the relevant entries with the National Council for Vocational Education and Training (NCVET) system.
The changes cover specified services connected with the National Skill Development Corporation (NSDC), recognised awarding bodies, assessment agencies, accredited training bodies and approved training partners, as well as qualifying vocational and Government skill development programmes.
The Guide also refers to Circular No. 55/29/2018-GST, dated August 10, 2018, concerning Industrial Training Institutes (ITIs), clarifying the distinction between qualifying designated-trade courses and other taxable training programmes.
GST Exemption Restored for NSDC Training Partners from January 16, 2025
The Guide draws particular attention to Notification No. 06/2025-Central Tax (Rate), which restored the specified GST exemption for NSDC-approved training partners with effect from January 16, 2025.
This followed an unintended disruption arising from the amendment to Entry No. 69 through Notification No. 08/2024-Central Tax (Rate), which had affected the exemption between October 10, 2024, and January 15, 2025.
Circular No. 245/02/2025-GST, dated January 28, 2025, records the GST Council’s recommendation to regularise the intervening period on an “as is where is” basis, under which tax already paid would not be refunded and tax not paid would not be recovered, in accordance with the applicable regularisation framework.
This development is particularly relevant for vocational training institutions, approved training partners and organisations implementing Government-supported skill development programmes.
Printed Books and E-Books Have Different GST Treatment
The Guide explains that printed books classified under Heading 4901 are generally exempt from GST, whereas qualifying electronic books supplied digitally are taxable at 5% GST.
The concessional rate applies under Notification No. 11/2017-Central Tax (Rate), as amended by Notification No. 13/2018-Central Tax (Rate), dated July 26, 2018, effective July 27, 2018.
However, where an eligible educational institution itself supplies an e-book to its students, faculty or staff, the transaction may qualify for exemption under Entry No. 66(a), depending upon the relevant statutory conditions.
Charitable Educational Institutions and Donations: Exemption Not Automatic
The Guide clarifies that registration under Section 12AA or Section 12AB of the Income-tax Act does not automatically make every activity of a charitable trust, society or not-for-profit educational organisation exempt from GST.
Entry No. 1 of Notification No. 12/2017-Central Tax (Rate) provides exemption for prescribed charitable activities, including specified educational and skill development programmes for identified beneficiary groups.
Further, Circular No. 116/35/2019-GST, dated October 11, 2019, clarifies that genuine philanthropic donations without a corresponding obligation to provide advertising or commercial benefits do not constitute consideration for a taxable supply merely because donors are acknowledged.
However, payments linked with sponsorship, advertising, promotional rights or other commercial benefits require separate examination.
Input Tax Credit Restrictions and Reverse Charge Compliance
The Guide identifies input tax credit (ITC) restrictions as a significant financial and compliance challenge for educational institutions.
Under Sections 17(2) and 17(5) of the CGST Act, 2017, ITC attributable to exempt supplies is restricted, while specified credits relating to construction, vehicles, food and catering services may be blocked, subject to statutory exceptions.
Where educational institutions undertake both exempt and taxable activities, common input tax credit must be appropriately apportioned under Rules 42 and 43 of the CGST Rules, 2017.
The Guide also draws attention to reverse charge obligations under Notification No. 13/2017-Central Tax (Rate), dated June 28, 2017, as amended, including specified security services received from non-body-corporate suppliers, and applicable reverse charge liabilities on other notified services.
It recommends separate classification of each income stream, identification of exempt and taxable supplies, proper ITC reversals and examination of reverse charge obligations to minimise disputes.
Export of Educational Consultancy Services and Emerging Digital Learning Issues
The Guide discusses significant judicial developments concerning educational consultancy and student recruitment services supplied to foreign universities.
In particular, it examines the 2026 developments in Global Opportunities Pvt. Ltd. and Fateh Education Consulting Pvt. Ltd., where the distinction between export of services and intermediary services was considered.
The treatment depends on the underlying contractual arrangements, the identity of the recipient and whether the Indian service provider supplies services on its own account or merely facilitates a transaction between other parties.
The Guide also identifies emerging interpretational issues involving cross-border online tutoring, Online Information and Database Access or Retrieval (OIDAR) services, Artificial Intelligence-based learning platforms, digital subscriptions and micro-credential programmes.
ICAI Highlights Need for Greater GST Clarity and Sector-Specific Compliance
The ICAI publication underscores the importance of a consistent and practical GST framework for education and training, particularly in view of the growing participation of private institutions, digital learning platforms and vocational training providers.
It highlights the need for greater clarity concerning the definition of educational institutions, university affiliation fees, short-term and executive courses, online education, composite supplies, hostel services and the availability of input tax credit.
Educational institutions and professional advisers are encouraged to undertake programme-wise classification, review individual fee components, verify recognition and approval status, examine vendor contracts and maintain appropriate documentation supporting exemption claims.
The Guide reinforces that GST exemption is determined by the nature of the educational service, the status of the supplier or recipient and the specific conditions prescribed under the law—not merely by the educational character or charitable status of an organisation.
The publication is expected to serve as an important reference for Chartered Accountants, educational institutions, universities, coaching providers, skill development organisations and other stakeholders navigating the evolving GST framework.
The Guide can be accessed at: https://a2ztaxcorp.net/wp-content/uploads/2026/10/GST-Sectoral-Guide-on-Education-and-Training-Services-26.09.2026.pdf
