A Complete Guide to GST on Coaching Centres, Online Courses & EdTech Platforms in India

The Indian education sector is experiencing an unprecedented boom, driven by the explosive growth of online courses and innovative EdTech platforms. This digital revolution has made quality education more accessible than ever before. However, for the entrepreneurs and institutions powering this change, this growth brings with it a web of tax obligations. A clear understanding of the rules for GST for coaching centres and digital education platforms is no longer optional; it is fundamental to legal compliance, accurate pricing strategies, and long-term financial stability. For coaching centre owners, EdTech startups, and individual tutors navigating the complexities of coaching services taxation India, this guide will provide a clear, comprehensive, and actionable overview of your Goods and Services Tax responsibilities.

What is GST and How Does it Apply to the Education Sector?

Before diving into the specifics, it’s essential to understand the basics of the Goods and Services Tax (GST). Introduced in 2017, GST is a comprehensive, multi-stage, destination-based tax that replaced numerous indirect taxes in India. It is levied on the supply of goods and services across the country, simplifying the tax structure into one uniform system. Understanding its components is the first step towards compliance.

The GST framework is divided into three main components, which determine how tax is collected based on the location of the transaction:

• CGST (Central GST): This portion of the tax is collected by the Central Government on intra-state transactions, meaning when the supplier and the consumer are located within the same state.
• SGST (State GST): This portion is collected by the State Government, also on intra-state transactions. For any sale within a state, both CGST and SGST are applied.
• IGST (Integrated GST): This tax is collected by the Central Government for all inter-state transactions, where the supplier and the consumer are in different states. It is a combination of both CGST and SGST rates.

While core educational services provided by government-recognized institutions—like schools, colleges, and universities that offer formal degrees—are largely exempt from GST, this exemption does not extend to the majority of the commercial education sector. Private coaching centres, vocational training institutes, and most online learning platforms provide services that are considered taxable under the GST regime. This distinction is critical and forms the basis for the tax liabilities faced by most private educational businesses in India.

GST Applicability: Are Coaching Centres and Online Courses Taxable?

This is the most critical question for anyone in the private education business, and the answer is straightforward: Yes, services provided by most private coaching centres, online courses, and EdTech platforms are taxable under GST. The government draws a clear line between formal, curriculum-based education leading to a recognized qualification and supplementary or commercial coaching. The latter is treated as a taxable service, bringing a vast array of educational providers under the GST net. Let’s explore how this applies to different models.

GST for Physical Coaching Centres

Physical coaching centres that offer supplementary education are a cornerstone of the Indian learning ecosystem. These institutions, which prepare students for school exams, competitive entrance tests like UPSC, JEE, and NEET, or provide specialized vocational training, are subject to GST. The law clarifies that if an institution is private and its services do not lead to a qualification recognized by any law, then its services are not exempt. This means that the fees collected from students for these coaching services are taxable. For GST coaching centres India, compliance is not just a matter of law but also a factor in maintaining a professional and transparent business operation, as students and parents are increasingly aware of these financial regulations.

GST for Online Courses & EdTech Platforms

The digital transformation of education has not changed the fundamental tax principles. The rules that apply to physical centres extend seamlessly to the online world. Whether you offer live online classes, sell pre-recorded video courses, or run a subscription-based learning app, your services are taxable. The GST implications for EdTech India are significant, especially as the sector continues to innovate. These digital services often fall under a specific category known as “Online Information and Database Access or Retrieval” (OIDAR) services, which have clear taxation guidelines. This ensures that GST online courses India and online education GST India are treated on par with traditional coaching, creating a level playing field for all forms of commercial educational services.

Key Exemptions to Note

To avoid confusion, it’s important to understand what is exempt. GST exemption primarily applies to services provided by an educational institution to its students, faculty, and staff. An “educational institution” is strictly defined as an institution providing services by way of:

• Pre-school education and education up to higher secondary school or equivalent.
• Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force.
• Education as a part of an approved vocational education course.

This exemption does not cover private coaching centres, hobby classes, or most online certification courses that aren’t part of a formal, legally recognized degree program.

What is the GST Rate on Coaching and Online Education Services?

Once it’s established that your educational service is taxable, the next crucial piece of information is the applicable tax rate. For the vast majority of commercial educational services, the GST rate is straightforward and consistent.

The current GST rate applicable to coaching centres, online courses, and other taxable educational services is 18%.

This rate is applied to the total fee collected from the student. How this 18% is charged depends on the “place of supply,” which is typically the location of the student.

• For intra-state services: If your coaching centre and your student are in the same state (e.g., a student in Mumbai attending a class in Pune), the 18% GST is split equally between central and state taxes.
  • 9% CGST + 9% SGST
• For inter-state services: If your business and your student are in different states (e.g., a tutor in Delhi teaching a student in Bengaluru online), the full 18% is charged as IGST.
  • 18% IGST

For accurate filing and invoicing, you must use the correct Services Accounting Code (SAC). The SAC for most educational support and coaching services is 9992. Using the correct SAC code is mandatory for generating GST-compliant invoices and filing accurate returns, ensuring your business is correctly classified within the tax system.

GST Registration for Coaching Centres and EdTech Startups

Registering your business for GST is the first and most fundamental step towards compliance. Failing to register when required can lead to significant penalties. The rules for registration are based on your annual turnover and the nature of your services. For a detailed overview, see our guide on Launching Your Startup Right – Mastering GST Registration in India.

When is Registration Mandatory?

GST registration becomes mandatory under two primary conditions:

1. Turnover-Based Registration: Any service provider, including a coaching centre or an online tutor, whose aggregate annual turnover exceeds ₹20 lakhs in a financial year must register for GST. For businesses operating in special category states (like those in the North-East), this threshold is lower at ₹10 lakhs. “Aggregate turnover” includes the total value of all taxable supplies, exempt supplies, exports, and inter-state supplies under the same PAN.
2. Compulsory Registration: Certain businesses must register for GST regardless of their turnover. The most relevant condition for online educators is providing inter-state taxable services. If you are an online tutor in one state providing services to a student in another, you are required to register for GST, even if your annual turnover is less than ₹20 lakhs. This rule makes GST registration essential for most businesses dealing with GST on online coaching India.

Step-by-Step Registration Process (Simplified)

The GST registration process is entirely online and can be completed through the official government portal.

1. Visit the official GST Portal: GST Portal.
2. Navigate to ‘Services’ > ‘Registration’ > ‘New Registration’. Fill out Part A of Form GST REG-01 with your PAN, mobile number, and email address.
3. Your details will be verified via OTPs, and you will receive a Temporary Reference Number (TRN).
4. Using the TRN, log in again and fill out Part B of the form. This is where you provide detailed information about your business, promoters, authorized signatories, and bank accounts.
5. Upload the required documents in the prescribed format.
6. Upon successful submission, you will receive an Application Reference Number (ARN).
7. A tax officer will review your application. If everything is in order, your GST registration certificate and your unique Goods and Services Tax Identification Number (GSTIN) will be granted within 3-7 working days.

Documents Required

To ensure a smooth registration process, keep the following documents ready:

• PAN Card of the business or proprietor.
• Aadhaar Card of the proprietor/partners/directors.
• Proof of business registration (e.g., Partnership Deed, Certificate of Incorporation).
• Proof of business address (e.g., latest electricity bill, rent agreement, property tax receipt).
• Bank account details (a copy of a cancelled cheque or bank statement).
• Passport-size photographs of the proprietor/partners/directors.

Understanding Input Tax Credit (ITC) for Your Coaching Business

One of the most significant advantages of the GST regime is the concept of Input Tax Credit (ITC). In simple terms, ITC allows you to reduce the GST you pay on your sales (output tax) by the amount of GST you have already paid on your business expenses (input tax). This mechanism prevents the “tax on tax” effect and effectively reduces your operational costs, making your services more competitive. For a deep dive, refer to our GST Input Tax Credit (ITC) Full Guide 2025 – Eligibility, Limits & Common Issues. For any growing coaching business, maximizing ITC is key to improving profitability.

To claim ITC, the expense must be used for the purpose of your business, and you must have a valid GST invoice from your supplier. Here are some common expenses on which coaching centres and EdTech platforms can claim ITC:

• Rent: The GST paid on the rent for your commercial premises is a significant expense eligible for ITC.
• Utilities: GST paid on business-related bills like internet services and telephone bills can be claimed.
• Office Supplies and Equipment: Purchases of stationery, furniture, whiteboards, projectors, computers, and laptops used for your business are all eligible for ITC.
• Marketing and Advertising: The GST paid to marketing agencies, for online advertisements (like Google or Facebook ads), or on printing promotional materials is fully claimable.
• Professional and Technical Fees: GST paid on legal, accounting, or other professional services.
• Software and Subscriptions: For coaching centres EdTech platforms India, this is a major category. GST on web hosting, learning management system (LMS) subscriptions, video conferencing software (like Zoom), and other digital tools can be claimed as ITC.

By meticulously tracking these expenses and ensuring your suppliers are GST-compliant, you can significantly lower your net tax liability. Proper bookkeeping and timely filing are essential to take full advantage of the ITC mechanism.

GST Compliance and Filing for Coaching Services

Registering for GST is just the beginning. Ongoing compliance is a continuous process that requires diligence and attention to detail. Staying on top of your compliance obligations is crucial to avoid penalties and legal issues.

The key aspects of GST compliance include:

• Issuing GST-Compliant Invoices: Every time you receive a fee from a student, you must issue a tax invoice. This invoice must contain mandatory details such as your business name and GSTIN, the student’s name and address, a unique invoice number, the date, the correct SAC code (9992), the taxable value, the GST rate (broken down into CGST/SGST or IGST), and the total amount.
• Maintaining Proper Records: You are required by law to maintain accurate records of all your sales, purchases, expenses, and ITC claims for at least six years. This includes invoices, bills, credit notes, and payment receipts.
• Filing GST Returns: This is the most critical compliance activity. Businesses are required to file periodic returns summarizing their financial activities. The most common returns are:
  • GSTR-1: A monthly or quarterly statement of your outward supplies (sales). This details all the invoices you have issued to your students.
  • GSTR-3B: A monthly summary return where you declare your total sales, tax liability, and ITC claimed. You must pay the net tax liability while filing this return.

  It is vital to file these returns by their respective due dates to avoid late fees and interest charges. For more information, read our guide on How to File GST Returns Online: A Step-by-Step Guide of the GST Filing Process & Procedure.

For businesses focused on GST compliance online courses India, correctly determining the “Place of Supply” is paramount. For online education services, the place of supply is generally the location of the service recipient (the student). This determines whether you should charge IGST (if the student is in a different state) or CGST + SGST (if the student is in the same state as your business). Getting this right is fundamental to correct tax calculation and compliance.

Conclusion

The education sector in India is dynamic and full of opportunities. While the tax landscape may seem daunting, understanding your obligations is the key to sustainable growth. The rules for GST for coaching centres, online courses, and EdTech platforms are clear: services are taxable at 18%, GST registration is mandatory once you cross the specified turnover threshold or engage in inter-state supply, and Input Tax Credit can be claimed on a wide range of business expenses to reduce costs. Most importantly, consistent and timely compliance through proper invoicing and return filing is non-negotiable.

Navigating the nuances of coaching centre tax applications India can be complex, but it’s a critical part of building a successful and legally sound educational enterprise. By embracing these regulations, you can focus on what you do best—delivering high-quality education to your students.

Don’t let GST complexities slow your growth. If you need expert guidance on registration, filing, or any other tax-related matter, contact TaxRobo’s experts today for a free consultation!

Frequently Asked Questions (FAQ) Section

Q1: What is the SAC code for coaching centres under GST?
A: The primary SAC code for educational support services, which includes most private coaching centres and online tutoring, falls under 9992. It’s crucial to use the correct code on your invoices and in your GST filings to ensure your services are classified correctly.

Q2: I run a small YouTube channel providing educational content. Do I need to register for GST?
A: GST registration depends on your turnover and the nature of your services. If your total annual revenue from all sources—including ad revenue, sponsorships, affiliate marketing, and any paid courses you offer—exceeds ₹20 lakhs, you must register for GST. Furthermore, if you provide paid services (like exclusive content or courses) to viewers outside your state, you are required to register for GST regardless of your turnover.

Q3: Can I claim ITC on the laptop I bought for teaching my online classes?
A: Yes, absolutely. As long as the laptop is purchased for your business and you have a valid GST invoice from the seller in your business’s name, you can claim Input Tax Credit on the GST paid. This principle applies to any goods or services, such as webcams, software, or internet subscriptions, that are used for the furtherance of your business.

Q4: Is GST applicable on free courses or study material provided by my coaching centre?
A: No, GST is not levied on services or goods provided completely free of cost as there is no transaction value. However, if you offer a “bundled” service where free study material is included with a paid course, GST will be applicable on the entire transaction value of the paid course. The “free” material is considered part of the overall taxable supply.