The Gujarat Authority for Advance Ruling (GAAR) has held that academic coaching services provided to middle and high school students are liable to Goods and Services Tax (GST) at the rate of 18 per cent, classifying them as “commercial training and coaching services.”

The ruling came in the case of a Surat-based coaching institute, which was providing academic coaching to students from Standards 5 to 12 under the GSEB and CBSE curricula. The authority observed that such services fall under Entry No. 599 (Service Code 999293) of Notification No. 11/2017-Central Tax (Rate) dated June 28, 2017, and are covered under “Education Services” as supplementary or commercial coaching. Accordingly, the services attract 18 per cent GST, comprising 9 per cent CGST and 9 per cent SGST.

A central issue before GAAR was whether such coaching services qualify for exemption under Entry No. 66 of the same notification, which grants GST exemption to services provided by an “educational institution.” The authority clarified that the applicant does not fall within this definition.

GAAR noted that the coaching services in question are not part of pre-school education or formal education up to higher secondary level. Further, they are not part of any curriculum leading to a qualification recognised by law, nor do they qualify as approved vocational education courses. As a result, the institute cannot be treated as an “educational institution” eligible for GST exemption.

Tax experts have expressed concern over the narrow interpretation adopted in the ruling. Ikesh Nagpal, Partner at AKM Global, stated that the decision reflects a strict reading of GST exemption provisions, where ambiguity is resolved in favour of revenue authorities. However, he cautioned that treating coaching as merely “supplementary” ignores its growing role as an extension of formal education.

He further noted that if such an interpretation continues, it may undermine the legislative intent behind exempting educational services. He emphasised the need for timely clarification from the government to bring certainty and avoid prolonged disputes, particularly in the education sector.

The ruling aligns with the position previously articulated by Finance Minister Nirmala Sitharaman following a GST Council meeting, where it was clarified that coaching centres and similar commercial training institutions do not qualify as educational institutions under GST law. Consequently, they are subject to the standard 18 per cent tax rate.

Industry bodies have consistently raised concerns regarding this classification. The Coaching Federation of India, in its pre-budget representation earlier this year, had urged the government to reduce GST on coaching services to 5 per cent or grant a complete exemption. The federation highlighted that coaching institutes have limited ability to claim input tax credit (ITC), increasing the effective tax burden.

The applicant had argued before GAAR that high taxation on coaching services adversely impacts affordability, particularly for students from low- and middle-income backgrounds. It was contended that such costs hinder access to quality education and exacerbate inequality in competitive exam outcomes.

The application also pointed out that specialised and skill-based coaching courses are often expensive, and additional tax burdens discourage participation, especially among economically weaker sections. The applicant urged that educational services up to Class 12 should be exempt from taxation across India.

While the GAAR ruling is binding only on the applicant and the concerned jurisdictional tax authorities, such advance rulings often carry persuasive value and are frequently relied upon in similar disputes and policy considerations.

Ruling Details

Applicant’s Name:  M/s. Sanjaykumar Ishwerlal Sadadiwala

Citation: JURISHOUR-1085-AAR-2026(GUJ) 

Ruling Date: 28/04/2026

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