GST Exemption on Affiliation Services for Government Schools: A Step Towards Financial Relief
In a significant move to support government schools and ease their financial burden, the Central Board of Indirect Taxes and Customs (CBIC) has issued Notification No. 08/2024. This notification exempts GST on affiliation services provided by educational boards and councils to government-controlled schools, starting from October 10, 2024.
Here’s a simplified breakdown of the key changes:
What’s New in Notification No. 08/2024?
This amendment to Notification No. 12/2017 – Central Tax (Rate) offers a GST exemption on affiliation services provided by Central/State Educational Boards, Councils, and similar bodies to government schools. These schools must be established, owned, or controlled by the Central Government, State Government, or any government entity.
Updated Entry for Affiliation Services
- GST Exemption: Affiliation services provided by recognized educational boards to government schools will now be GST exempt.
- Service Heading: 9992
- Effective Date: October 10, 2024
This change will reduce the cost burden on government schools when they seek affiliation from educational bodies like CBSE and state boards.
What About the Past (2017–2021)?
For the period between July 1, 2017, and June 17, 2021, where GST might have been levied on affiliation services, the GST Council has decided to regularize these issues on an ‘as is where is’ basis. This means that the tax treatment for these past periods remains unchanged, and no retroactive adjustments will be made.
Why Is This Amendment Important?
- Support for Government Schools: The exemption helps reduce costs for government-run schools, enabling them to allocate more resources for quality education.
- Simplified Tax Compliance: By regularizing the past tax issues, the decision avoids any confusion or legal disputes, making the process smoother for educational bodies.
- Encouraging Educational Growth: Without the added burden of GST, more government schools will be able to seek affiliation with recognized educational boards, fostering growth in the education sector.
Who Will Benefit?
- Government Schools: These schools will no longer have to pay GST on affiliation services, cutting down costs.
- Educational Boards and Councils: Bodies like CBSE, state boards, and vocational councils will benefit by not having to charge GST for services provided to government schools.
What About Other Tax Laws?
In addition to the exemption under the CGST Act, similar provisions have been made under:
- Integrated Goods and Services Tax Act (IGST)
- Union Territory Goods and Services Tax Act (UTGST)
This ensures that the exemption applies uniformly across all states and union territories, benefiting government schools nationwide.
Conclusion
This exemption is a step in the right direction to support educational institutions and make education more accessible by reducing unnecessary tax burdens. From October 10, 2024, government schools will no longer face GST on affiliation services, easing their financial strain and allowing them to focus more on delivering quality education.
