Impact of GST on Education system

Goods and services tax

Goods & Services Tax (GST) is an indirect tax throughout India to replace taxes levied by the central and state governments. The GST is governed by GST Council and its Chairman is Finance Minister of India. Under GST, goods and services will be taxed at the following rates, 0%, 5%, 12%, 18%, 28%. Though Pre-primary and higher secondary educational services to remain tax-free still it is expected that GST is making higher education costlier in private institutions. Higher education institutions will have to pay GST when availing of a wide range of services. provided by the government will, however, remain tax-free. 

You might be thinking HOW GST is causing all these..??
Education is considered a service, and most services are taxable. However, a ‘Negative List’ was introduced in 2012 under which certain services, including education, were kept out of the tax ambit.
The notification says that services provided by pre-schools or higher secondary educational institutes, private or government, shall remain tax-free. Services provided to higher educational institutions are taxable. While services provided by an educational institution are out of the GST ambit, unfortunately the same is not the case with services provided to an educational institution.
Textbooks and notebooks
You might be thinking how weird it is to hear that the textbook have 0% tax while the notebooks have 18% tax levied on them.
Services in the nature of transportation, catering, housekeeping, admissions or examination conduct if provided to higher educational institutions were subject to service tax.Any other education and training services are currently liable to service tax at 15 per cent.All these services, when provided by universities and higher education colleges, however, are taxable. Given the importance of higher education, in a country like ours, there is an urgent need to revisit this,” says Sapra.
Increase of taxation
With GST to be rolled out on July 1, A fresh batch of students is waiting to enter the colleges and universities, as various higher entrance exams are currently underway. It is going to cost them more than what they might be expecting.
Two things seems very clear. One, the competition to enter a government college is going to get tougher;
and two, higher education from private institutions is going to burn a bigger hole in your pocket.
GST , touted as the single biggest tax reform in independent India is expected to add 2 per cent to the country’s GDP (gross domestic product).


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