Education plays a vital role in a nation’s social and economic growth. Recognizing this, the Government of India ensures that core educational services remain outside the ambit of GST. The idea is simple — learning should never be taxed like business.
To achieve this, the GST law provides specific exemptions for educational institutions under Notification No. 12/2017 – Central Tax (Rate), dated 28 June 2017. The relevant entries are Entry 66 and 66A, which define what kinds of education and services qualify for GST exemption.
Let’s break down these provisions, understand who is covered, and see real-world examples to make things crystal clear.
1. Legal Framework
The power to exempt educational services comes from Section 11 of the CGST Act, read with Notification No. 12/2017-CT (Rate).
The key entries are:
- Entry No. 66: Core exemption for educational institutions.
- Entry No. 66A: Inserted to extend exemption to services provided to government-funded educational bodies.
2. Who Is an Educational Institution?
The term “educational institution” has been specifically defined for GST purposes. As per the notification, it means an institution providing services by way of:
- Pre-school education and education up to higher secondary (Class 12).
- Education as part of a curriculum for obtaining a qualification recognized by any law (like degree/diploma courses from UGC or AICTE-approved bodies).
- Vocational education and training courses approved by: (a) The National Council for Vocational Training (NCVT), or (b) The State Council for Vocational Training (SCVT).
These are considered the core education categories fully exempt under GST.
3. What’s Covered under Entry 66
Entry 66 of the notification provides two broad exemptions:
(a) Services provided by an Educational Institution
All services by educational institutions to:
- Students,
- Faculty, or
- Staff, are exempt from GST.
This means the fees collected for teaching, admission, exams, or issuing certificates are not subject to GST.
(b) Services Provided to an Educational Institution
Certain supporting services provided to educational institutions are also exempt — but only for institutions up to higher secondary level.
4. Examples of Exempt Educational Services
💡 Example 1 (Littleways Public School):
A CBSE-affiliated school charges tuition fees and exam fees.
👉 Exempt under Entry 66(a), since it provides education up to higher secondary level.
Example 2 (Kaladrishti ITI):
An Industrial Training Institute (ITI) offers vocational courses recognized by NCVT.
👉 Exempt under Entry 66(a), since vocational courses recognized by law qualify as “educational institution.”
💡 Example 3 (DIT University):
A private university offering degree programs recognized by UGC.
👉 Its services to students and faculty (tuition, examinations, counseling) are exempt under Entry 66(a).
However, renting its auditorium for a commercial conference would be taxable, as it’s not an educational activity.
5. Supporting Services Exempt to Schools
Certain services provided to educational institutions (up to higher secondary level) are also exempt from GST. These include:
- Transportation of students, faculty, and staff.
- Catering services (including mid-day meals under government schemes).
- Security, cleaning, or housekeeping services performed in educational premises.
- Services relating to admission or conduct of examination (like exam forms, hall ticket printing, or IT platform support).
These exemptions exist to reduce costs for schools and ensure that essential support functions remain affordable.
Example 4 (Shiksha Seva Pvt. Ltd.):
A transport agency provides buses to a school for daily student pickup.
👉 Exempt from GST, since it’s a service provided to an educational institution (up to higher secondary level).
Example 5 (HealthyMeals NGO):
An NGO provides mid-day meals under a government scheme to a government school.
👉 Exempt under Entry 66(b), as catering to schools under government programs qualifies.
6. Non-Exempt Educational Activities (Taxable Services)
While core educational services are exempt, many ancillary or commercial activities by educational institutions are taxable.
| Activity | Status | Reason |
| Renting of premises for exhibitions or events | ❌ Taxable | Not for educational purpose |
| Sale of uniforms, books, or stationery | ❌ Taxable | Supply of goods |
| Providing training unrelated to recognized curriculum | ❌ Taxable | Not recognized by law |
| Hostel accommodation | ✅ Exempt (if integral part of education) | Treated as composite supply |
| Transport & exam services | ✅ Exempt | Covered under Entry 66(b) |
💡 Example 6 (EduMart Pvt. Ltd.):
A private coaching center conducts “crash courses” for competitive exams like CAT or NEET.
👉 Taxable, since coaching for entrance exams is not part of a curriculum recognized by law.
7. Entry 66A – Services to Government-Funded Educational Institutions
To widen the scope, the government added Entry 66A (via Notification No. 02/2018-CT(R)), which exempts services provided to educational institutions funded by the government (≥50%).
Scope:
- Applicable to colleges, universities, or institutions receiving 50% or more funding from the Central, State, or Union Territory Government.
- Covers all services provided to such institutions, regardless of the level of education.
Example (Gyaani Government College):
A private contractor provides cleaning services to a government-funded college (funded 70% by State Govt).
👉 Exempt under Entry 66A, since the recipient is a government-funded educational institution.
8. Clarifications by CBIC (Circular References)
To avoid confusion, the Central Board of Indirect Taxes and Customs (CBIC) issued several circulars clarifying the interpretation of Entry 66.
Circular No. 82/01/2019-GST (dated 1 Jan 2019):
Clarified that:
- Services relating to conduct of entrance examinations, even for higher education, are exempt.
- Example: CBSE conducting JEE or NEET on behalf of UGC/AICTE — exempt under Entry 66(b).
Circular No. 234/28/2024-GST (dated 31 Mar 2024):
- Reaffirmed that IT and administrative services related to the conduct of exams are also exempt.
- Example: Digital form submission portals or hall ticket verification systems.
9. Composite and Mixed Supplies in Education
Sometimes, an institution provides both educational and non-educational services together — these need special treatment.
(a) Composite Supply (Exempt)
If services like hostel facilities or transport are naturally bundled with education and charged together, they’re treated as composite supplies and exempt.
(b) Mixed Supply (Taxable)
If the institution offers optional services (like training + sale of course materials), where education is not the principal supply, GST may apply.
Example (University Hostel Case):
The university provides students with boarding and lodging along with degree courses.
👉 Treated as composite supply of education — exempt.
However, if the university rents rooms to external guests, that portion is taxable.
10. Vocational Training Exemption – Importance for Skill India
Vocational training centers affiliated with NCVT or SCVT are considered educational institutions. Hence, their services — and services provided to them — are exempt from GST.
Example:
A government-recognized ITI provides plumbing and electrical training.
👉 Exempt, since vocational courses are recognized by law.
But if a private skill academy offers non-recognized courses like personality development or English speaking, those are taxable.
11. Online Education and E-Learning – Current Status
Post-2020, many institutions shifted to online education, raising doubts about GST applicability.
The ICAI clarifies:
- Online education by recognized educational institutions is exempt (same as offline mode).
- However, EdTech platforms or private coaching apps not affiliated with recognized boards or universities are taxable.
Example:
An online university offering UGC-approved MBA degrees → Exempt. A private app selling coding courses for profit → Taxable.
12. ITC (Input Tax Credit) Restrictions
Educational institutions providing only exempt services cannot claim ITC on:
- Building maintenance
- Furniture and equipment purchases
- Security or catering vendor invoices
However, if the institution also provides taxable services (like renting auditoriums or training for a fee), ITC can be claimed proportionately.
13. Key Takeaways
- Education up to higher secondary, recognized degree courses, and vocational training are exempt under GST.
- Services to educational institutions (transport, catering, exam-related) are also exempt.
- Entry 66A extends exemption to government-funded colleges.
- Coaching centers and commercial training are taxable.
- Composite education services (with hostel/transport) remain exempt.
- Circulars 82/2019 and 234/2024 clarify that exam and IT-related services are exempt.
- Online education by recognized bodies is exempt; EdTech platforms are not.
14. Conclusion
Education is not just another sector — it’s a public good. The GST exemptions for educational institutions ensure that the cost of learning remains affordable and equitable.
By keeping schools, recognized universities, and vocational training outside GST, the law promotes accessibility and skill development while preventing unnecessary financial burden on students.
Through clear entries (66 & 66A) and recent clarifications, the GST Council strikes a balance between revenue needs and social welfare, ensuring that education continues to enlighten — not burden — India’s future.
