Hostel fee charged by school, colleges free from GST: Finance Ministry

Mumbai: Remaining true to its claim of keeping education free from GST, the Finance Ministry on Thursday clarified that there will be no GST levied on annual subscription/fees charges for lodging in hostels under educational institutions.

Addressing fake reports that claim 18 per cent GST will be levied on annual fee charged by hostels, the ministry said, “There is no change in tax liability relating to education and related services in the GST era, except reduction in tax rate on certain items of education”.

The ministry statement further clarified that services that an educational institute provides to its students, faculty and staff are “fully exempt” from GST.

It further went on to define educational institution as one imparting “pre-school education and education up to higher secondary school or equivalent or, education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force or, education as a part of an approved vocational education course”.

Therefore, the services of lodging in hostels provided by all such educational institutions do not fall under the ambit of GST.

The Finance Ministry and the GST Council have from the very start maintained that education will not attract GST. Only some items that fall under the category of education, like school bags have been taxed under GST.

The ministry has been issuing a slew of clarifications to make citizens aware of the new tax regime that has transformed the Indian taxation system.