The education sector plays a vital role in shaping the future of the nation. Taxing this sector has always been a complex issue. As we all are aware, a majority of services in India are under the purview of GST. However, understanding the sensitivity and importance of the education sector, the GST Act has tried to maintain a fine balance whereby core educational services are exempt from GST, and other commercial education services are taxed at a standard rate.
Next, we'll know GST on education services, GST on coaching classes, GST on online courses, GST on training services and the question are online courses taxable in India?
Interestingly, the term ‘Education’ is not defined in the CGST act. However, as per the Apex Court's decision, we can agree that ‘Education is the process of training and developing the knowledge, skill and character of students by normal schooling.’ or gst on online education courses. Digital Learning through online courses has become a new trend. In this article, we will discuss the taxability (under GST) of Educational Services provided digitally (online courses) and about GST on online courses.
Educational services that are taxable under GST which includes GST on online education services as well:
The Government exempts GST on online education on various services. Some of the exempted services are:
Online Information Database Access and Retrieval (OIDAR) services are a bundle of services that are provided through the medium of the internet and are received by the recipient online without having any physical interface with the supplier of such services. However, ‘Educational or professional courses, where the content is delivered by a teacher over the internet’ is explicitly excluded from the OIDAR services list and there's no GST for online courses of these types.
From the above points, we can infer that online courses are not OIDAR services. They are Education services that will be classified under the Heading 9992. As of today, online courses are not explicitly exempted from GST. These services are taxable at the rate of 18% ( 9% CGST + 9% SGST).
Recruitment fees charged by educational institutions are taxable.