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CA Intermediate · Taxation · Exemptions from GST

Shree Vidya Trust runs a recognised school in Pune and provides transportation of its students to and from the school using its own buses, charging a separate transport fee. A parent asks whether this service attracts GST. Under the GST exemption notifications, what is the correct position?

The transport service is exempt from GST. Services provided by an educational institution to its students, faculty and staff are covered by the exemption, and student transportation is one of them. Charging a separate fee does not remove the exemption, and there is no monthly fee limit.

  1. AExempt, as it is a service provided by an educational institution to its studentsCorrect
  2. BTaxable at 5% because transport is a separate service
  3. CTaxable at 18% because the school charges a separate fee
  4. DExempt only if the fee is below Rs 1,000 per month

Explanation

Services provided by an educational institution to its students, faculty and staff are exempt, and this includes transportation of students. The separate fee does not change the character of the service. Hence options taxing it are wrong, and no monthly fee ceiling exists.

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