Educational services:
Tax on coaching Centres in India
Ref : Economy Times, PIB
The incomes of coaching centres are also covered under this act and are taxable under the head “Income from Business and Profession
Profit from tuition
Compulsory Maintenance of Books of Accounts
Books of accounts have to be compulsorily maintained, where income exceeds Rs 2,50,000 or total sales, turnover, or gross receipts exceed Rs 25,00,000 in the previous three years. Books of Accounts are to be maintained for 6 years from the end of the relevant financial year.
Books of Accounts include:
Cash Book
Journal
Ledger
Copies of Bills/Receipts
Daily Cash Register
Trading Account
Profit & Loss Account
Balance Sheet
How to calculate tax for coaching institutes
If a person wants to adopt presumptive income under section 44 ADA, then his income will be taxable on presumptive basis @50% of total gross receipts.
However, if the person claims to have higher income than above 50%, then he has to maintain proper Books of Accounts, and tax has to be paid on Net Income i.e. Gross Receipts less all expenses relating to Business.
GST on Coaching Institutes
Since coaching centers are neither offering an acknowledged degree/diploma, nor complying with the particular academic curriculum therefore they are taxable @ 18% under GST Act. Only the supply of books is exempt. If the coaching institute is providing services like transportation, food, housekeeping services or stationery or any such other facilities, then all such facilities are taxable under GST.
Since coaching centres do not provide any recognised qualification or adhere to a certain curriculum, they will no longer be exempted from GST and will be required to pay 9 % state GST in addition to 9 % central GST.
In entry number 66 of the notification, it is mentioned that there will
be an exemption to specific institutions, if those are offered by an
educational institution, subject to specific conditions. The conditions
are stated as follows:
The service offered is associated with education.
Education is offered as part of the academic curriculum.
Education is provided for acquiring a qualification identified by any law that is in effect for the time being.
The Central Board of Excise and Customs (CBEC) also affirmed that private coaching institutions will no longer be regarded as educational institutions. So, private coaching establishments can’t get any tax exemption. Additionally, the coaching imparted at those private establishments isn’t regarded as a recognized qualification.
Conclusion
Coaching centres have to file GST
returns in GSTR-1 and GSTR-3B either monthly or quarterly according to
their total invoice amount. If they have opted for the Composition
Scheme, then they have to pay tax in CMP-08 and file GSTR-4 once in a
year.
- If a person wants to adopt presumptive income under section 44 ADA, then his income will be taxable on presumptive basis @50% of total gross receipts.
- Cash Book
- Journal
- Ledger
- Copies of Bills/Receipts
- Daily Cash Register
- Trading Account
- Profit & Loss Account
- Balance Sheet
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