Clarification regarding GST on supply of various services by Central and State Board (such as National Board of Examination)

Circular Number 151/07/2021-GST dated 17th June 2021

1.Certain representations have been received seeking clarification in respect of
taxability of various services supplied by Centre and State Boards such as National
Board of Examination (NBE). These services include 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 authorise them to provide their respective
services. The issue was examined by GST Council in its 43rd meeting held on 28th
May, 2021.

  1. Illustratively, 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.
  2. According to explanation 3(iv) of the notification No. 12/ 2017 CTR, “Central and
    State Educational Boards” are treated as Educational Institution for the limited
    purpose of providing services by way of conduct of examination to the students.
    Therefore, NBE is an ‘Educational Institution’ in so far as it provides services by way
    of conduct of examination, including any entrance examination, to the students.
    3.1 Following services supplied by an educational institution are exempt from
    GST vide sl. No. 66 of the notification No. 12/ 2017- Central Tax (Rate) dated
    28.06.2017,
    Services provided –
    (a) by an educational institution to its students, faculty and staff;
    (aa) by an educational institution by way of conduct of entrance
    examination against consideration in the form of entrance fee;
    3.2 Similarly, services provided to an educational institution, relating to
    admission to, or conduct of examination is also exempt from GST [sl. No. 66 (b)(iv)-
    12/2017-CT(r)].
    3.3 Educational institutions are defined at 2(y) of the said notification as follows-
    “(y) educational institution” means an institution providing services by way of, –
    (i) pre-school education and education up to higher secondary school or
    equivalent;
    (ii) education as a part of a curriculum for obtaining a qualification recognized by
    any law for the time being in force;
    (iii) education as a part of an approved vocational education course;”;
    Further, clause (iv) of Explanation of said notification reads as below:
    “(iv) For removal of doubts, it is clarified that the Central and State Educational Boards
    shall be treated as Educational Institution for the limited purpose of providing services
    by way of conduct of examination to the students”
  3. Taking into account the above, the GST Council has recommended, to clarify
    as below:
    (i) 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 notif 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.
    (ii) 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 notif No. 12/2017-
    CT(R)].
    (iii) 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 authorise them to provide their respective services.