The Coaching Federation of India (CFI) has urged Finance Minister Nirmala Sitharaman to reduce the Goods and Services Tax (GST) on coaching and supplementary education services to 5 per cent or exempt them entirely, citing rising costs for parents and mounting pressure on small coaching centres.
In a representation submitted on January 28, the New Delhi-based body said coaching institutes have limited ability to claim input tax credit, unlike manufacturing or trading businesses, making GST a direct pass-through to student fees.
“As a result, GST becomes a direct add-on to fees, effectively transferring the tax burden to parents,” the Federation stated.
Coaching No Longer Discretionary
Emphasising the changing nature of education, Keshav Agrawal, Vice President, CFI, said coaching has become essential for many families.
“With competitive exams such as JEE, NEET, CUET, CA, CLAT, SSC and UPSC now central to academic and career progression, coaching is no longer a discretionary service, especially for middle-class households,” he said.
Proposal to Raise GST Exemption Limit
The Federation also called for revising the ₹20 lakh GST exemption threshold, describing it as outdated given rising rents, salaries and operating costs. It proposed increasing the limit to ₹1 crore for coaching and supplementary education services.
According to CFI, the current threshold disproportionately impacts small institutes with thin margins, while larger chains benefit from scale and greater compliance capacity.
Risk of Informality
CFI warned that the existing tax structure is encouraging informality, with some small centres opting to remain unregistered and parents increasingly seeking “no-GST” alternatives.
A more balanced tax regime, the Federation said, would improve voluntary compliance, reduce costs for students, and align with the objectives of the National Education Policy 2020.
The Federation has also sought a stakeholder consultation with the finance ministry ahead of the Union Budget, scheduled to be presented on February 1.
Source: HT