In a significant move to support government educational institutions and reduce the tax burden on affiliation services, the Central Board of Indirect Taxes and Customs (CBIC), through Notification No. 08/2024 – Central Tax (Rate), has exempted affiliation services provided by Central/State Educational Boards, Educational Councils, and other similar bodies to government schools from Goods and Services Tax (GST).
This decision follows the recommendations made by the GST Council in its 54th meeting held on September 9, 2024. The exemption applies prospectively, beginning from October 10, 2024, while past issues, between July 1, 2017, and June 17, 2021, are to be regularized on an ‘as is where is’ basis.
Key Changes Introduced by Notification No. 08/2024
The notification amends Notification No. 12/2017 – Central Tax (Rate), originally issued on June 28, 2017, by inserting a new entry after Serial No. 66 to grant GST exemption on affiliation services provided by recognized educational boards and councils to government schools.
Updated Entry for Affiliation Services (Serial No. 66A)
The following new entry has been added under Serial No. 66A, which pertains to affiliation services provided to government-controlled schools:
| Serial No. | Service Heading | Description of Service | GST Rate | Conditions |
|---|---|---|---|---|
| 66A | Heading 9992 | Services of affiliation provided by a Central/State Educational Board, Council, or any other similar body to schools established, owned, or controlled by the Central Government, State Government, Union Territory, Local Authority, Governmental Authority, or Government Entity. | Nil | Nil |
This entry provides a GST exemption for the affiliation services rendered by these recognized bodies to government schools, helping ease the financial burden on the government’s educational infrastructure.
Effective Date and Scope
The exemption for affiliation services to government schools will come into effect on October 10, 2024. This change applies prospectively, meaning any new services offered from this date onward will not be subject to GST.
Regularization for Past Period (2017–2021)
In addition to the prospective exemption, the GST Council has addressed the issue of taxation for the period between July 1, 2017, and June 17, 2021. The Council has decided that any pending issues or disputes related to GST on affiliation services during this period will be regularized on an ‘as is where is’ basis. This means that the tax treatment applied in the past will remain unchanged, and no retrospective changes or adjustments will be made for this period.
Objective of the Amendment
The key objectives of this amendment are as follows:
- Support for Government Schools: By exempting GST on affiliation services, the government aims to reduce the financial burden on government-controlled schools and enhance the availability of resources for quality education.
- Simplifying Tax Compliance: The decision to regularize issues for the past period (2017–2021) on an ‘as is where is’ basis ensures that schools and educational bodies can avoid retrospective tax complications, offering clarity and certainty.
- Encouraging Educational Growth: The exemption is expected to encourage educational bodies and government institutions to engage in more affiliation programs without worrying about the additional GST burden, thereby promoting education across government schools.
Implications for Educational Institutions
The following bodies will be impacted by the GST exemption:
- Central/State Educational Boards: Organizations such as the CBSE (Central Board of Secondary Education) and various State Boards offering affiliation services to government schools will now be able to provide their services without levying GST.
- Educational Councils and Similar Bodies: Bodies involved in skill-based or vocational education, recognized by the government, will also benefit from the GST exemption for services provided to government-controlled schools.
- Government Schools: Schools established, owned, or controlled by the Central Government, State Government, Union Territories, or Local Authorities will benefit from reduced costs related to affiliation services.
Similar Notifications under IGST and UTGST Acts
In addition to this notification under the Central Goods and Services Tax (CGST) Act, similar exemptions have been passed under:
- The Integrated Goods and Services Tax Act, 2017 (IGST Act), and
- The Union Territory Goods and Services Tax Act, 2017 (UTGST Act),
This ensures a uniform application of the GST exemption across all states and union territories, promoting consistent tax treatment for government schools nationwide.
The introduction of Notification No. 08/2024 – Central Tax (Rate) is a significant step towards supporting government schools and reducing the financial burden on their affiliation with recognized educational bodies. By exempting GST on affiliation services, the government aims to promote educational growth and simplify tax compliance for schools and educational boards.
The prospective exemption from October 10, 2024, combined with the regularization of past issues (2017–2021), provides much-needed clarity and financial relief to educational institutions.
Educational boards, councils, and government schools should review these changes and ensure that they align with the new provisions to take advantage of the GST exemptions moving forward.
This article provides a comprehensive overview of Notification No. 08/2024 and explains the implications for educational bodies and government schools in the context of GST exemption for affiliation services.
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