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CA Intermediate · Taxation · Exemptions from GST

Mehta Charitable Trust, Surat, runs a school providing pre-school education up to higher secondary. In a month it receives: tuition fees ₹6,00,000; transport fees from students for school buses ₹1,50,000; fees for conducting an entrance-coaching course for outsiders, a commercial activity, ₹2,00,000 (taxable at 18%). Ignore ITC and assume the school is registered. What is the GST payable for the month?

GST payable is ₹36,000. Tuition and transport services supplied by the school to its own students are exempt. Only the entrance-coaching service to outsiders is taxable, and 18% of ₹2,00,000 equals ₹36,000. Taxing transport as well would wrongly give ₹63,000.

  1. A₹36,000Correct
  2. B₹63,000
  3. C₹1,53,000
  4. D₹0

Explanation

Services by an educational institution to its students, faculty and staff are exempt, including transport services provided to its students. Coaching for outsiders is not a service to its students, so it is taxable: 18% of ₹2,00,000 = ₹36,000. Taxing the transport too would give ₹63,000, which wrongly ignores the exemption for transport to its own students.

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