The Gujarat Authority for Advance Ruling (GAAR) has held that coaching services for school students will attract 18% GST, classifying them as ‘supplementary education’ and not as part of formal schooling. | Photo Credit: SS Kumar

Cost for coaching of middle or high school students unlikely to see a reduction, as a ruling by Gujarat’s Authority for Advance Ruling (GAAR) holds that 18 per cent GST applies to this as ‘supplementary education.’

“The academic coaching services provided by Friends Classes, Surat to students of Standards 5 to 12 (GSEB/CBSE curriculum) are covered under ‘Education Services’ at Sr.No.30 of Notification No.11/2017-Central Tax (Rate) dated 28.06.2017, falls under Entry No.599 ( Service Code (Tariff) 999293) of Annexure to Notification No.11/2017-Central Tax (Rate) dated 28.06.2017 as ‘commercial training and coaching services’ and is liable to GST at 18 per cent (9 per cent CGST + 9 per cent SGST),” GAAR said in its recent ruling.

Experts flag concerns over interpretation

Ikesh Nagpal, Lead- Indirect Tax at AKM Global, said that this reflects a strict interpretation of GST exemptions, aligning with the principle that ambiguities favour revenue.

However, treating coaching as merely “supplementary” overlooks its central role as an extension of formal schooling.

“If sustained, this approach may even call into question the intent behind exempting educational services. It is crucial for the department to step in with timely clarification to ensure certainty and settle ongoing disputes, particularly in the educational sector,” he said.

GST Council stance and industry demands

This ruling reiterates what Finance Minister Nirmala Sitharaman said last year after the GST Council meeting, recommending overall rates. She had said that, as coaching and other similar commercial training centres are not treated as educational institutions, the 18 per cent tax rate applies to them.

Earlier this year, in its pre-budget submission, the Coaching Federation of India (CFI) sought a reduction in GST on coaching services to 5 per cent or NIL (complete exemption), saying that coaching institutes have limited scope to offset tax through input tax credit (ITC).

Applicant raises affordability concerns

Meanwhile, the Surat-based applicant moved to GAAR, arguing that high costs affect the quality of education and make it less accessible to low- and middle-income groups entering top institutions, worsening success inequalities.

Specialised education and skill-based courses are expensive, discouraging skill development efforts outside the traditional formal system for economically weaker sections. They firmly believe that taxes must not apply to any educational institutions for the students of up to 12th Std. all over India, the application said.

GAAR rejects exemption claim

However, GAAR observed that the supplementary education provided by the applicant is neither pre-school education and education up to higher secondary school or equivalent nor education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force nor ‘education as a part of an approved vocational education course’ and is therefore not covered under the definition of ‘Educational Institution’ as defined in GST notification.

Ruling limited but influential

Since “the exemption under Entry No.66 of the notification is available only to ‘Educational Institutions’, the said exemption is not available to the applicant as it is not covered under the definition of ‘Educational Institution,” the authority said while disposing of the application. It may be noted that an AAR ruling applies only to the applicant or the concerned tax office, but many such rulings have served as the basis for policy-making.

Published on May 4, 2026