Why coaching is not exempt
The exemption for education covers services by an educational institution to its students where the institution provides education as part of a curriculum for obtaining a qualification recognised by law, such as school education or a recognised degree. Private coaching for entrance exams or competitive tests does not lead to such a qualification, so it is taxable. Under the official SAC list, commercial training and coaching is 999293, and education services not exempt are taxed at 18%. The September 2025 rate changes did not alter this.
Study material and goods lines
Printed books are goods under chapter 49 and are largely exempt or taxed at a low rate, depending on the item. If the centre bundles books into the course fee as a single price, the supply is generally composite with coaching as the principal supply, and the whole amount takes 18%. If books are priced separately and the student can choose not to buy them, they can be billed as goods under their own HSN. Decide the structure and stick to it in the fee schedule.
Instalments and advances
Parents often pay fees before a batch begins. Since coaching is a service, tax is due when payment is received or the invoice is issued, whichever is earlier. Each instalment should therefore be invoiced, or receipted with a receipt voucher, when collected. Refunds on withdrawal need a refund voucher or credit note, referring to the original document.
Registration and composition
A coaching centre below ₹20 lakh of turnover need not register. Above it, the centre may consider the services composition scheme at 6% up to ₹50 lakh, since students cannot claim input tax credit. This is often a sensible option for single-location tuition classes that do not teach students in other states online.
Online coaching across states
Centres teaching online to students in other states make inter-state supplies, with the place of supply generally the student's location for unregistered recipients. Composition is not available for inter-state supplies, and IGST applies. Capture the student's state at enrolment so the right tax is charged.
Franchise fees
Coaching brands that grant franchises receive franchise fees and royalties, which are taxable at 18% under trademark and franchise services, SAC 998396. Franchise owners should expect GST on these and can claim credit if registered.