Is GST charged on coaching fees and school fees?
Services by a school to its students are generally exempt from GST, but coaching is taxable at 18%, so a coaching centre needs tax invoices, receipt vouchers for advances and refund vouchers, and you should verify every point with your CA.
Last reviewed: Published: 9 min read
Quick answer: under Notification 12/2017-Central Tax (Rate), entry 66, services by an educational institution to its students and staff are exempt from GST, which covers school education up to higher secondary. Coaching is taxable at 18%. Coaching centres must register once their aggregate turnover crosses the threshold (₹20 lakh for services, ₹10 lakh in some special-category states), collect GST on fees, issue tax invoices and, because coaching fees are usually collected before the teaching starts, issue receipt vouchers for advances and refund vouchers or credit notes for refunds. This guide is a map of the questions to put to your CA; it is not tax advice, and the points below come from research notes that are marked "verify with CA".
Which fees are exempt and which are taxable?
| Fee or service | Typical treatment | Notes |
|---|---|---|
| School tuition and regular school fees up to higher secondary | Exempt (entry 66) | Services by an educational institution to its students and staff |
| Coaching or tuition by a coaching centre | Taxable at 18% | Register after the turnover threshold; ₹20 lakh for services, ₹10 lakh in some special-category states |
| Hostel for students | Exempt up to ₹20,000 per person per month for stays of 90 days or more | Rule effective since 15 Jul 2024; check the conditions |
| Services supplied to a school (transport, catering, security, cleaning, admission and exam work) | Certain services to schools are exempt | Applies to the supplier's invoice to the school |
| Exercise books, pencils, erasers | Nil rate from 22 Sep 2025 (news source) | Check the notification before relying on it |
| Printed books | Nil rate (news source) | Check the notification |
| Clothing and uniforms | Up to ₹2,500 at 5% from 22 Sep 2025 (news source) | Check price slabs with your CA |
| Our software subscription (for a coaching centre) | 18% GST; input tax credit available to coaching centres | Schools cannot claim input tax credit |
What if one institute does both school and coaching?
Mixed institutes are where mistakes happen. A school that also runs a paid coaching or foundation programme, an add-on class, or sells uniforms and books has some supplies exempt and some taxable. Tag each fee head with a taxable or exempt flag and an SAC or HSN code, keep separate ledgers, and ask your CA whether the combination affects your registration threshold. Aggregate turnover is counted across the same legal entity, so a trust running both a school and a coaching wing may cross the ₹20 lakh threshold sooner than expected.
Why do advance fees need receipt vouchers?
Coaching fees are normally collected before the classes begin. Under GST, an advance payment for a taxable service generally needs a receipt voucher when the money is received, and the tax is payable accordingly; later, a tax invoice is raised for the service. Quotes are often tax-inclusive, with the GST back-calculated from the total. These timing points are unverified in our notes: ask your CA exactly when a receipt voucher is needed and how to show the tax split.
| Event | Document usually needed | Fields to capture |
|---|---|---|
| Student pays an advance or the first instalment | GST receipt voucher (and your fee receipt) | Date, amount, taxable value, GST rate and amount, SAC, GSTIN if the payer is a business |
| Service is supplied (course delivered) | Tax invoice | Invoice number, date, taxable value, GST split, place of supply |
| Student leaves and fees are returned | Refund voucher, credit note if an invoice exists | Reference to the original receipt or invoice, refunded amount, tax adjusted |
| Fee is revised or an invoice corrected | Credit note or debit note | Reference to the original invoice and the reason |
| Business (B2B) payer such as an employer sponsoring a student | B2B invoice with the payer's GSTIN | Customer GSTIN and legal name |
How should refunds and GST work together?
A pro-rata coaching refund (see how to calculate a coaching fee refund) returns the unused part of the fee. If GST was charged on the original amount, the tax on the refunded portion is adjusted through a refund voucher or credit note. For a fee of ₹59,000 including 18% GST, where 80% is refunded, the refund is ₹47,200 made up of ₹40,000 fee and ₹7,200 GST. Whether you can adjust the tax in the same month and what reports to file are matters for your CA.
When do e-invoicing and cash limits matter?
- E-invoicing: applies above ₹5 crore of aggregate turnover. Most small institutes are below it; larger coaching chains may not be.
- Cash: receipts of ₹2 lakh or more are barred in three windows: from one person in a day, in a single transaction, and for one event or occasion (for example one course). Splitting a course fee into two ₹1.2 lakh cash payments still breaks the rule. This was formerly section 269ST; check the equivalent in the new Income-tax Act 2025 with your CA.
- Section changes: the Income-tax Act 2025 took effect on 1 Apr 2026 and renumbered TDS sections and forms, so avoid hard-coding old form numbers on documents.
How do you set up GST correctly in your fee system?
Setting up GST for school and coaching fees
Step 1: list every fee head
Tuition, admission, hostel, mess, transport, books, uniforms, exam, coaching add-ons and so on.
Step 2: decide the treatment with your CA
For each head, record taxable or exempt, rate, SAC or HSN and the ledger it posts to.
Step 3: check registration
Compare aggregate turnover for the legal entity with the threshold and decide when to register.
Step 4: configure documents
Make sure the system can issue receipt vouchers, tax invoices, refund vouchers and credit notes, and prints GSTIN where required.
Step 5: guard cash
Add a warning when cash receipts approach the ₹2 lakh limits for one person, transaction or event.
Step 6: reconcile monthly
Export the GST summary to your CA each month and review mismatches before filing.
What does the software do and not do?
A fee system can carry the taxable or exempt flag and SAC or HSN code per fee head, issue GST tax invoices and credit notes, support B2B invoices with GSTIN and warn about cash limits. Form references and rates come from a rule pack, not from code, so they can change with a notification. It does not give tax advice, and it does not include GST e-invoice (IRN) integration. See fee receipts that hold up and the Tally export guide.
Is private school tuition exempt from GST?
Services by an educational institution to its students up to higher secondary are generally exempt under entry 66. Separate charges outside core education, such as certain add-on classes, need your CA's view.
Do coaching centres have to charge 18% GST?
Coaching is taxable at 18% once you are registered. Registration is needed above the aggregate turnover threshold, which is ₹20 lakh for services, or ₹10 lakh in some special-category states.
Can a school claim input tax credit on software?
Schools generally cannot claim input tax credit because their main supply is exempt, while coaching centres, whose supply is taxable, can. Confirm with your CA.
Do I issue a GST invoice when the parent pays an advance?
Usually a receipt voucher is issued for the advance and a tax invoice when the service is supplied. Ask your CA how to apply this to instalments.
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