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Education not in service tax net

Auxilliary services, like bus services, canteen, housekeeping also exempt from tax

BS Reporter New Delhi
The finance ministry has clarified that all services provided to educational institutions are exempt from tax.

There are certain auxiliary services, which would also not be taxable if provided to education institutions in relation to education. For example, if a school hires a bus from transport operator to ferry students to and from school, the services provided by the operator in this connection would not be levied tax.

The clarification came after the ministry received representations from various educational institutions.

Service tax was introduced in 1994, starting with just three services. Then it expanded to over 100 areas by 2012. In 2012, the government came out with a negative list, which means items not covered in this category are taxable.

The list includes various forms of education services. Besides, it also includes auxiliary education services and renting of immovable property by educational institutions in relation to education.

Service tax is levied at the rate of 12 per cent.
 

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First Published: Sep 21 2013 | 9:22 PM IST

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