Coaching Institutes Not “Educational Institutions” for GST Exemption

The applicant, a proprietor running “Friends Classes” in Surat, was engaged in providing academic coaching to students of Standards 5 to 12 affiliated with GSEB and CBSE boards. The services involved supplementary education aimed at improving students’ academic performance through additional teaching, doubt-solving, and exam preparation.

The applicant sought an advance ruling on whether such coaching services qualify as exempt “education services” under Entry 66 of Notification No. 12/2017-CTR or are taxable as commercial coaching services. It was argued that education up to Class 12 is fundamental and that coaching institutes play a crucial role in supporting students’ learning.

Issue Before Court: Whether supplementary coaching services provided to school students qualify as exempt “education services” or are taxable under GST as commercial coaching services.

Tribunal Decided: The Authority for Advance Ruling held that the services provided by the applicant do not qualify for exemption under Entry 66 of Notification No. 12/2017. It was observed that such an exemption is limited to services provided by an “educational institution” as defined under the notification. The authority noted that the applicant was not imparting formal education as part of a recognised curriculum leading to a qualification but was instead providing supplementary coaching.

Such services merely support school education and do not fall within the scope of preschool, school education, or recognised vocational courses. Thus, the AAR classified the services under “commercial training and coaching services” (SAC 999293) under Notification No. 11/2017-CTR. The services were held liable to GST at 18% (9% CGST + 9% SGST).

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