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CA Intermediate · Taxation · Exemptions from GST

Sharada Vidyalaya, a registered charitable trust in Pune, runs a recognised school providing education up to higher secondary. During the month it received Rs 8,00,000 as tuition fees from students and Rs 60,000 for a school bus service provided to the same students for commuting to the school. Considering the GST exemption for educational institutions, how should the receipts be treated?

Both receipts are exempt. Services provided by an educational institution to its students, faculty and staff are exempt from GST, and a recognised school's tuition and its bus service for those same students both qualify as services to students.

  1. ABoth the tuition fees and the bus charges are exemptCorrect
  2. BTuition fees are exempt and the bus charges are taxable at 18%
  3. CTuition fees are taxable but the bus charges are exempt
  4. DBoth the tuition fees and the bus charges are taxable

Explanation

Services provided by an educational institution to its students, faculty and staff are exempt. Transport of students to and from the school is a service provided to its students, so it falls within this exemption. Treating the bus service as taxable ignores that it is supplied to the students themselves.

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