An advance ruling by the Authority for Advance Rulings (AAR) in Gujarat has determined that private coaching classes, such as those run by Sanjaykumar Ishwerlal Sadadiwala's Friends Classes in Surat, do not qualify as "educational institutions" under GST law. As a result, these classes are subject to an 18% GST, categorized as commercial coaching services. Friends Classes, which has been offering supplementary education to students from Standards 5 to 12 under GSEB and CBSE boards, sought clarification on whether their services could be exempt under Entry 66 of Notification No. 12/2017-Central Tax (Rate).
The applicant argued that their services were essential for providing additional academic support, thereby aiding students' educational performance. They emphasized that such services should not be taxed as it could hinder access to quality education for middle-class and economically disadvantaged students. However, the AAR clarified that the GST exemption is reserved for "educational institutions" as defined by the notification, which includes formal schooling and recognized curriculum-based education.
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The Authority concluded that Friends Classes provides supplementary coaching rather than formal education, and thus, does not meet the criteria for exemption. Referring to Notification No. 11/2017-Central Tax (Rate), the services fall under SAC 999293, related to "commercial training and coaching services," making them taxable at 18%, split equally between CGST and SGST.
Order Date - 29 April 2026
Facts -
- Sanjaykumar Ishwerlal Sadadiwala, proprietor of Friends Classes, Surat, had been running coaching classes for students of Standards 5 to 12 under GSEB and CBSE boards for more than four decades to help students improve academic performance through extra guidance and exam preparation.
- The applicant argued that education is a fundamental right and that tuition classes merely support school education by providing conceptual clarity, additional practice, and personalized learning to students who require extra academic assistance.
- Friends Classes sought an advance ruling on whether its coaching services could be treated as exempt “education services” under Entry 66 of Notification No. 12/2017-Central Tax (Rate) or whether they would attract GST as commercial coaching services.
- During the hearing, the applicant emphasized that tuition services should not be burdened with tax because increasing educational costs reduce accessibility for middle-class and economically weaker students seeking quality education.
Issue -
- Whether academic coaching provided by Friends Classes to students from Classes 5 to 12 qualifies for GST exemption as educational services?
Order -
- The Authority observed that GST exemption under Entry 66 is available only to an “educational institution” as specifically defined under the notification. The definition covers institutions imparting formal schooling, recognized curriculum-based education, or approved vocational education, and not every organization connected with learning activities.
- The Authority noted that Friends Classes was only providing supplementary coaching to students already enrolled in schools. Such coaching was considered additional academic support aimed at improving performance, clearing doubts, and assisting in examinations, rather than providing formal school education itself.
- The bench clarified that even though the coaching classes contribute to education and social welfare, they do not become part of the recognized school curriculum or statutory educational framework. Therefore, they cannot claim the legal status of an “educational institution” for GST exemption purposes.
- Referring to Notification No. 11/2017-Central Tax (Rate), the Authority held that the services squarely fall under SAC 999293 relating to “commercial training and coaching services.” Consequently, the coaching services provided by Friends Classes are taxable at 18% GST, comprising 9% CGST and 9% SGST.
