GST on Online Education: Rate, Exemptions & EdTech Impact
With digital learning becoming the new norm, many schools, coaching centers, and EdTech companies have moved their offerings online. But is education over the internet taxed? In this blog, we’ll explore the GST on online education, including the applicable tax rates, exemptions, HSN/SAC codes, and the impact of GST on the fast-growing EdTech sector in India.
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Is Online Education Taxable Under GST?
Yes, but it depends on who is offering the service and how it is categorized.
- Educational institutions providing online classes as part of formal education (e.g., schools, colleges, universities) are exempt from GST.
- However, commercial online courses, EdTech platforms, and online coaching classes are taxable.
This makes understanding the category of service critical.
GST Rate on Online Education Services
| Type of Online Education Service | GST Rate |
|---|---|
| Online coaching classes (e.g., UPSC, JEE, NEET) | 18% |
| Online certificate/diploma courses by non-accredited platforms | 18% |
| Online services by schools or colleges affiliated with boards | Exempt |
| Online training for skill development (non-recognized) | 18% |
SAC Code for Online Education Services
| Service | SAC Code | GST Rate |
|---|---|---|
| Online coaching classes | 999293 | 18% |
| Vocational training (non-accredited) | 999293 | 18% |
Refer to the SAC Code list for correct filing and invoicing.
What Kind of Online Education is Exempt from GST?
As per GST rules, the following are exempt from GST:
- Services provided by educational institutions to their students, faculty, and staff
- Services provided to educational institutions (like transportation, catering, security, etc.)
- Online learning platforms that are part of government-approved education boards or universities
This means GST online classes from private tutors or EdTech apps are taxable, but school-led virtual classes are not.
Input Tax Credit (ITC) for EdTech Companies and Online Educators
Businesses offering online coaching classes or running EdTech platforms can claim ITC on:
- Software tools and platform subscriptions
- Marketing and ad services
- Hosting, domain, and tech infrastructure
- Professional services like design and content development
Learn more about Input Tax Credit benefits for digital service providers.
Impact on the EdTech Industry
The GST for online courses affects learners and providers in multiple ways:
For Students:
- Increases cost of paid courses by 18%
- No GST refund for learners
For Businesses:
- Enables ITC on business expenses
- Requires GST compliance and monthly filings
Conclusion
The GST on online education clearly distinguishes between formal education and commercial training. While services by recognized educational institutions are GST-free, most online courses and coaching services attract an 18% GST. For EdTech businesses, GST compliance and ITC benefits are vital to operations. For students, understanding tax implications helps make better enrollment decisions in a rapidly growing digital learning ecosystem.
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I am a Chartered Accountant with 5 years of experience specializing in GST, income tax, and HSN code classification. I help businesses with GST compliance, tax planning, and financial advisory, ensuring they meet regulatory requirements while optimizing their tax strategies. I aim to simplify GST filings, income tax laws, and HSN code classifications, helping professionals and business owners stay informed and compliant.
Frequently Asked Questions (FAQs)
- What is the GST on online education in India?Online education services are taxed at 18% unless they are offered by a government-recognized educational institution.
- Are online coaching classes taxable under GST?Yes, online coaching classes attract 18% GST.
- Is GST applicable on online courses from private institutions?Yes, unless the course is government-approved or part of a recognized curriculum.
- Can EdTech companies claim input tax credit?Yes, GST-registered companies can claim Input Tax Credit (ITC) on eligible business-related expenses.
- Are school online classes taxable under GST?No, if provided by recognized schools or colleges, they are exempt.
