NEW DELHI: Refuting reports that hostel fee charged by educational institutions will attract 18 per cent Goods and Services Tax (GST), the Finance Ministry on Thursday said such services provided to students, faculty and staff are fully exempt under the new indirect tax regime.
"There are some reports that GST at the rate of 18 per cent will be levied on annual subscription/ fee charged for lodging in hostels. This is not true. There is no change in tax liability relating to education and related services in the GST era, except reduction in tax rate on certain items of education," the ministry clarified in a statement.
"It may be mentioned that services provided by an educational institution to students, faculty and staff are fully exempt," it said.
Services of lodging/ boarding in hostels provided by such educational institutions which are providing pre-school education and education up to higher secondary school or equivalent or education leading to a qualification recognised by law, are fully exempt from the GST.
"Annual subscription/ fees charged as lodging/ boarding charges by such educational institutions from its students for hostel accommodation shall not attract GST," the statement noted.
Society maintenance of up to Rs. 5000 was also exempt under GST.