GST on Education and Coaching Services India 2026

Education is one of the most nuanced sectors under the GST framework. The law draws a hard line between recognised educational institutions, which enjoy a broad exemption, and commercial coaching or training providers, which are taxed at the standard 18% rate. If you run a coaching centre, operate a skill development academy, or manage the finances of a school or college, the classification of your institution determines your entire GST compliance obligation.

This guide covers every scenario that education and coaching businesses face under the current GST framework, including the impact of GST 2.0 and recent AAR rulings through June 2026.

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What Qualifies as an "Educational Institution" Under GST?

The GST exemption for education services is not available to every entity that teaches. Entry 66 of Notification No. 12/2017-Central Tax (Rate) defines "educational institution" narrowly. Only the following qualify:

1. Pre-school education and education up to higher secondary school or equivalent
2. Education as part of a curriculum for obtaining a qualification recognised by any law for the time being in force (degree, diploma, or certificate from a university or board established by central/state government or Parliament)
3. Education as part of an approved vocational education course run by the National Council for Vocational Training (NCVT), State Council for Vocational Training (SCVT), or their equivalent bodies

If your institution does not fall into one of these three categories, it is not an "educational institution" for GST purposes, and the exemption does not apply.

Exempt vs Taxable Education Services

Comparison

GST on Education: Exempt vs Taxable

Classification depends on institutional recognition, not the subject taught

Parameter	Exempt (0% GST)	Taxable (18% GST)
Government/aided school (pre-school to Class 12)	Exempt under Entry 66
Private school (CBSE/ICSE/state board affiliated)	Exempt under Entry 66
University degree programme (UGC recognised)	Exempt under Entry 66
NCVT/SCVT approved vocational course	Exempt under Entry 66
Coaching centre for JEE/NEET/UPSC		18% GST (SAC 999293)
Private tuition classes for school subjects		18% GST (SAC 999293)
Spoken English / personality development institute		18% GST (SAC 999293)
Corporate training and skill workshops		18% GST (SAC 999293)
IIM executive education (non-degree)		18% GST (SAC 999293)
Online course by foreign platform (Coursera, Udemy)		18% IGST (OIDAR rules)
Driving school		18% GST (SAC 999293)

Takeaway: The exemption turns on institutional recognition, not the subject matter. A school teaching mathematics is exempt; a coaching centre teaching the same mathematics for competitive exam preparation is taxable at 18%.

Source: Entry 66, Notification No. 12/2017-Central Tax (Rate); SAC Classification

SAC Codes for Education and Coaching Services

The Services Accounting Code (SAC) determines the classification and rate that applies to your service on GST invoices and returns.

For coaching institutes: Use SAC 999293 on all invoices, GSTR-1 filings, and GST registration documents. Misclassifying your service under an exempt SAC code is a compliance risk that will surface during audit.

Services Exempt Under Entry 66: The Full Scope

Entry 66 exempts not just tuition fees but a range of services provided by educational institutions. The exemption covers:

Services to Students, Faculty, and Staff

All services by an educational institution to its students, faculty, and staff are exempt. This includes:

• Tuition fees and academic charges
• Library and laboratory fees
• Examination fees charged by the institution
• Placement services provided by the institution to its students

Transportation Services (Entry 66(a))

Transportation of students, faculty, and staff by an educational institution or by a third party under contract with the institution is exempt. The vehicle can be owned by the institution or hired, as long as the institution contracts and pays for the service.

Catering and Hostel Services (Entry 66(b))

Catering services provided to an educational institution are exempt, subject to an annual cap of Rs 15,000 per person per annum. Hostel accommodation provided by an educational institution to its students is also exempt within this limit. If the annual value per person exceeds Rs 15,000, GST applies on the excess amount.

Mid-Day Meal Scheme

Services provided under the mid-day meal scheme sponsored by the central or state government are exempt separately under Entry 66A. This covers the caterer supplying meals, not just the institution.

Coaching Centres: 18% GST, Full Compliance

If you operate a coaching centre, tuition class, test preparation institute, or commercial training academy, your services are taxable at 18% (9% CGST + 9% SGST for intra-state, or 18% IGST for inter-state).

Gujarat AAR Ruling, May 2, 2026

The Gujarat Authority for Advance Rulings issued a ruling on May 2, 2026 that reinforced this position. The applicant, a coaching institute preparing school students for board examinations and competitive entrance tests, argued that since its students were school-age children and the syllabus overlapped with school curriculum, it should qualify for the Entry 66 exemption.

The AAR rejected this argument. The ruling held that coaching institutes provide "supplementary education" that falls outside the scope of Entry 66. The institute was neither a school recognised by a board nor a university. The students were enrolled in separate schools and attended the coaching centre for additional preparation. The services were therefore commercial coaching under SAC 999293, taxable at 18%.

This ruling is consistent with earlier AAR decisions across multiple states and reinforces that the exemption follows the institution, not the student's age or the subject matter.

What Coaching Institutes Must Charge

Composite supply note: When a coaching centre bundles study material, test series, and coaching into a single fee, the entire supply is treated as a composite supply under Section 2(30) of the CGST Act. The principal supply is coaching (SAC 999293), so 18% GST applies to the full bundle. You cannot split the invoice to claim exemption on the books component.

ITC Rules: Coaching Centres vs Educational Institutions

This is the most practical difference between taxable coaching centres and exempt educational institutions.

Coaching Centres: ITC Available

Since coaching centres charge 18% GST on output, they can claim input tax credit on GST paid for:

• Rent for premises (18% GST on commercial rent)
• Furniture, computers, projectors, and classroom equipment
• Software subscriptions and digital platforms
• Advertising and marketing expenses
• Professional services (accounting, legal)
• Stationery and printing of study materials

ITC reconciliation matters. Coaching institutes must reconcile ITC claims against GSTR-2B auto-populated data monthly. Any mismatch between your claimed ITC and what suppliers have reported will trigger the IMS (Invoice Management System) workflow.

Educational Institutions: No ITC

Schools, colleges, and universities providing exempt services have zero output tax liability. Under Section 17(2) of the CGST Act, ITC is not available on inputs used to make exempt supplies. This means:

• A school paying 18% GST on building rent cannot claim ITC on that rent
• A college purchasing computers with 18% GST absorbs the entire GST as a cost
• The GST paid by educational institutions on inputs becomes part of their operating cost

Mixed-use institutions: Some institutions provide both exempt services (degree programmes) and taxable services (executive education, consultancy). In such cases, ITC must be apportioned under Rule 42 and Rule 43 of the CGST Rules based on the ratio of taxable to exempt turnover.

IIM Executive Education: A Special Case

The Indian Institutes of Management (IIMs) illustrate the line between exempt and taxable education services. Degree programmes (MBA, PGDM recognised by AICTE) delivered by IIMs to enrolled students are exempt under Entry 66.

However, IIM executive education programmes, management development programmes (MDPs), and short-term certificate courses that do not lead to a recognised degree or diploma are taxable at 18%. These are commercial training services under SAC 999293. IIMs charge GST on these programme fees and issue tax invoices to corporate participants.

Online Education and OIDAR Rules

Online courses, webinars, and digital learning platforms delivered by providers located outside India to students in India fall under the OIDAR (Online Information and Database Access or Retrieval) framework.

Key rules:

• Foreign providers delivering online education to Indian consumers must register for GST in India and charge 18% IGST on the consideration received
• Platforms like Coursera, Udemy, and LinkedIn Learning that supply courses to individual (non-business) consumers in India are liable to register and pay IGST under the OIDAR provisions
• If the Indian recipient is a registered business (B2B transaction), the tax is paid by the recipient under the reverse charge mechanism (RCM)
• Indian coaching centres delivering online classes to students within India charge regular 18% GST (OIDAR rules do not apply to domestic suppliers)

For a detailed breakdown of OIDAR compliance, see our guide on OIDAR GST compliance for foreign digital services in India.

Practical Example: Monthly GST for a Coaching Centre

Consider a NEET coaching institute in Hyderabad with 200 enrolled students, each paying Rs 1,50,000 per year (Rs 12,500 per month). The institute operates from rented commercial premises.

Monthly fee collections (200 students x Rs 12,500):

• Taxable value = Rs 25,00,000
• GST at 18% = Rs 4,50,000 (Rs 2,25,000 CGST + Rs 2,25,000 SGST)
• Total billed to students = Rs 29,50,000

Monthly input costs with GST:

Total ITC available per month: Rs 1,37,700

Net GST payable: Rs 4,50,000 (output) minus Rs 1,37,700 (ITC) = Rs 3,12,300

This is the amount the coaching institute deposits via GSTR-3B each month. The ITC on rent alone saves the institute Rs 54,000 per month, which is why maintaining proper invoices from all suppliers and reconciling GSTR-2B monthly is critical.

Compare this with a school: A recognised private school collecting the same Rs 25 lakh in monthly fees pays zero GST. The school also cannot claim ITC on the Rs 1,37,700 in input GST it pays. That amount becomes an embedded cost in the school's operating expenses.

Reverse Charge Mechanism (RCM) in Education

Certain services received by coaching centres trigger RCM obligations, where the recipient (your coaching centre) must pay GST instead of the supplier.

Common RCM scenarios for coaching institutes:

ITC on RCM: GST paid under reverse charge by a coaching institute is eligible for ITC, since the institute has taxable output. The RCM amount paid can be claimed as ITC in the same month's GSTR-3B.

GST Registration Thresholds for Education Businesses

Note for coaching centres near the threshold: The Rs 20 lakh threshold applies to aggregate turnover, which includes the value of all taxable, exempt, and export supplies. If you also sell exempt printed books alongside coaching, the book sales count toward aggregate turnover even though they are not taxable.

GST 2.0 Impact on Education Services (September 2025)

Under the GST 2.0 rate restructuring effective September 22, 2025:

• The exemption for recognised educational institutions remains unchanged. Entry 66 of Notification 12/2017-CT(R) was not modified.
• The 18% rate for commercial coaching and training services continues. SAC 999293 stays in the 18% slab.
• The abolished 28% slab (replaced by 40%) does not affect education or coaching services, which were never in the 28% bracket.
• The elimination of the 12% slab has no direct impact on coaching institutes, as these services were already at 18%.

In short, the education and coaching GST framework is structurally unchanged under GST 2.0.

Compliance Calendar for Coaching Institutes

Coaching centres registered under the regular GST scheme must meet these filing deadlines:

QRMP scheme: Coaching institutes with aggregate turnover up to Rs 5 crore can opt for the Quarterly Return Monthly Payment (QRMP) scheme. Under this, GSTR-1 and GSTR-3B are filed quarterly, but tax is deposited monthly via the PMT-06 challan.

Invoicing Requirements for Coaching Centres

Every coaching centre registered under GST must issue a tax invoice for each fee collection. The invoice must include:

• Your GSTIN and the student's name (or parent/guardian's name if the student is a minor)
• Invoice number (unique, sequential) and date
• Description of service: "Coaching services for [course name]" with SAC code 999293
• Taxable value, applicable GST rate (18%), and CGST/SGST or IGST breakup
• Place of supply (the state where coaching is delivered)

B2B invoices: If a corporate client sends employees for training, the invoice must include the client's GSTIN. The corporate client can claim ITC on the 18% GST charged, provided the training is for business purposes.

Receipts for advance fees: Many coaching centres collect annual fees upfront or in quarterly instalments. Under Section 13(2) of the CGST Act, GST liability arises at the time of receipt of advance payment for services. If you collect Rs 1,50,000 as annual fees in April, you must account for the full 18% GST (Rs 27,000) in your April GSTR-3B, not spread it across 12 months.

Credit notes: If a student withdraws and you refund a portion of fees, issue a credit note within the time limit prescribed under Section 34 of the CGST Act. The credit note reduces your output tax liability in the month of issuance.

Common Mistakes in Education GST

1. Coaching centres claiming exemption under Entry 66. The exemption is for educational institutions as defined in the notification. A coaching centre, regardless of affiliation with a school or the age of its students, is not an educational institution under GST law.

2. Schools charging GST on tuition fees. Recognised schools and colleges should not charge GST on tuition, examination, or library fees. If a school is incorrectly charging GST, it must refund the amount to students or deposit it with the government.

3. Not apportioning ITC in mixed-use institutions. Universities that run both exempt degree programmes and taxable executive education must apportion ITC under Rule 42/43. Claiming full ITC without apportionment will trigger demand notices.

4. Ignoring OIDAR obligations for online courses. Foreign education platforms with Indian students have a GST registration and filing obligation. Non-compliance results in the Indian student or business bearing the tax under RCM.

5. Treating bundled coaching packages as mixed supply. A coaching bundle (tuition + study material + tests) is a composite supply, not a mixed supply. The principal supply determines the rate. Splitting the bundle to exempt the books component is incorrect.

6. Exempt institutions not tracking the Rs 15,000 hostel/catering cap. Hostel and catering services are exempt only up to Rs 15,000 per person per year. Amounts above this threshold attract GST, and the institution must register if it crosses the turnover limit on taxable services.

Frequently Asked Questions

Are coaching centres exempt from GST in India?

No. Coaching centres, private tuition classes, test preparation institutes, and commercial training academies are not classified as educational institutions under GST law. They provide taxable services under SAC 999293 at 18% GST. Only recognised schools (up to higher secondary), universities, and NCVT/SCVT-approved vocational courses qualify for the Entry 66 exemption.

What is the GST rate on coaching and tuition fees?

Coaching and tuition fees attract 18% GST (9% CGST + 9% SGST for intra-state supply, or 18% IGST for inter-state). This applies to all commercial coaching services, including JEE/NEET preparation, UPSC coaching, spoken English classes, corporate training, and skill development courses that do not lead to a recognised qualification.

Can coaching institutes claim input tax credit?

Yes. Since coaching institutes pay 18% GST on their output services, they are eligible to claim ITC on GST paid for inputs such as rent, furniture, computers, marketing, professional services, and study material printing. ITC must be reconciled monthly against GSTR-2B data.

Is GST applicable on school fees in India?

No. Services provided by recognised educational institutions (pre-school through higher secondary, and law-recognised colleges and universities) to students, faculty, and staff are exempt under Entry 66 of Notification No. 12/2017-Central Tax (Rate). Tuition fees, examination fees, library charges, and placement services by such institutions are all GST-exempt.

What is the GST treatment of hostel fees charged by a school or college?

Hostel accommodation and catering services provided by an educational institution to its students are exempt under Entry 66(b), subject to an annual cap of Rs 15,000 per person. If the annual hostel or catering charge exceeds Rs 15,000 per person, GST applies on the amount above the threshold.

Do foreign online education platforms need to pay GST in India?

Yes. Foreign providers delivering online courses to Indian consumers fall under OIDAR (Online Information and Database Access or Retrieval) rules and must register for GST in India and charge 18% IGST. For B2B transactions where the Indian recipient is GST-registered, the recipient pays tax under the reverse charge mechanism.

Is the IIM executive education programme exempt from GST?

IIM degree programmes (MBA, recognised PGDM) are exempt under Entry 66 as they lead to qualifications recognised by law. However, executive education programmes, management development programmes, and short-term certificate courses that do not lead to a recognised degree are taxable at 18% GST under SAC 999293.

What changed for education GST under GST 2.0?

The GST 2.0 rate restructuring effective September 22, 2025 did not alter the education and coaching framework. The exemption for recognised educational institutions under Entry 66 remains intact. Commercial coaching services continue at 18%. The abolished 28% slab (replaced by 40%) and elimination of the 12% slab have no impact on education or coaching services.

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Sources and verification: This guide draws from Entry 66 of Notification No. 12/2017-Central Tax (Rate) as amended, Sections 2(30), 7, 9, and 17(2) of the CGST Act 2017, the Services Accounting Code (SAC) classification under Heading 9992 and 9993, and the Gujarat AAR ruling dated May 2, 2026 on coaching institute taxability. OIDAR provisions referenced from the IGST Act, 2017 and Notification No. 9/2017-Integrated Tax. ITC apportionment rules per Rule 42 and Rule 43 of the CGST Rules 2017. Rates and exemptions verified against ClearTax (cleartax.in/s/gst-education-sector), TaxGuru (taxguru.in/goods-and-service-tax/gst-educational-services.html), and IndiaFilings (indiafilings.com/learn/gst-education-sector) as of June 2026. The Rs 15,000 hostel/catering exemption cap verified against Entry 66(b) of Notification 12/2017-CT(R).