Taxability of Services provided/received by Central and State Educational Boards.
National Board of Examination (NBE) is involved in several services such as entrance examination (on charging a fee) for admission to educational institution, input services for conducting such entrance examination for students. accreditation of educational institutions or professional so as to authorize them to provide their respective services. NBE provides services of conducting entrance examinations for admission to courses including Diplomat National Board (DNB) and Fellow of National Board (FNB), prescribes courses and curricula for PG medical studies, holds examinations and grant degrees, diplomas and other academic distinctions. It carries out all functions as are normally carried out by central or state educational boards and is thus a central educational board.
The term “Educational institutions” are defined in 2(y) of the Notification No. 12/ 2017 Central Tax (Rate), as follows-
“educational institution” means 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.
Additionally, explanation 3(iv) of the said notification states “Central and State Educational Boards” as Educational Institution for the limited purpose of providing services by way of conduct of examination to the students.
Recently, CBIC vide Circular No. 151/07/2021-GST has made clarifications on tax implications upon various services provided/received by the Central and State Board including NBE. This circular clarified that NBE is an educational institution relatively to the extent it provides services by way of conduct of examination, including any entrance examination, to the students. Further, GST impact on various services provided/received by educational boards is clarified as under:
- GST is exempt on services provided by Central or State Boards (including the boards such as NBE) by way of conduct of examination for the students, including conduct of entrance examination for admission to educational institution [under S. No. 66 (aa) of Notification No. 12/2017-CT(R)]. Therefore, GST shall not apply to any fee or any amount charged by such Boards for conduct of such examinations including entrance examinations.
- GST is also exempt on input services relating to admission to, or conduct of examination, such as online testing service, result publication, printing of notification for examination, admit card and questions papers etc. when provided to such Boards [under S. No. 66 (b) (iv) of Notification No. 12/2017- CT(R)].
- GST at the rate of 18% applies to other services provided by such Boards, namely of providing accreditation to an institution or to a professional (accreditation fee or registration fee such as fee for FMGE screening test) so as to authorize them to provide their respective service