New GST on Online Education: Rate, Exemptions & EdTech Impact
- The online course GST rate is generally 18% for private online courses and coaching services unless a specific education exemption applies.
- Online coaching classes, non-accredited courses, and private skill training generally attract 18% GST, unless covered by an approved vocational education exemption.
- Education services provided by qualifying educational institutions to their students, faculty and staff are generally exempt from GST.
- EdTech companies providing taxable education services may claim eligible Input Tax Credit (ITC) on business expenses, subject to normal GST conditions.
- GST treatment depends on the type of course, the status of the education provider, and whether the service qualifies for an exemption.
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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New GST Rate on Online Education Services
The new GST on education changes effective from 22 September 2025 did not introduce a separate GST rate for online courses. The online course GST rate generally remains 18% for private coaching and non-recognised courses, while eligible education provided by qualifying educational institutions remains exempt.
| Type of Online Education Service | GST Rate | Rate Before 22 Sep 2025 |
|---|---|---|
| Online coaching classes (e.g., UPSC, JEE, NEET) | 18% | 18% |
| Online certificate/diploma courses by non-recognised platforms | 18% | 18% |
| Eligible education services by qualifying educational institutions | Exempt | Exempt |
| Online skill development training not covered by an approved vocational education exemption | 18% | 18% |
Type of Online Education Service
GST Rate
Rate Before 22 Sep 2025
Type of Online Education Service
GST Rate
Rate Before 22 Sep 2025
Type of Online Education Service
GST Rate
Rate Before 22 Sep 2025
Type of Online Education Service
GST Rate
Rate Before 22 Sep 2025
Note: The exemption applies to eligible services supplied by an educational institution to its students, faculty or staff, including education as part of a curriculum leading to a qualification recognised by law and approved vocational education courses. Private coaching and EdTech platforms that do not qualify for an exemption are generally taxable at 18%. Cross-border online services may also be subject to OIDAR and place-of-supply rules.
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.
SAC Code for Online Education Services
| Service | SAC Code | GST Rate |
|---|---|---|
| Online coaching / commercial training classes | 999293 | 18% |
| Other non-accredited education or training services | 999294 | 18% |
Service
SAC Code
GST Rate
Service
SAC Code
GST Rate
Refer to the SAC Code list for correct filing and invoicing.
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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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