Introduction of service tax:

1.07.2012, the concept of Service Tax has changed. What is taxed now is an activity which gets
covered under the scope of service as defined in section 65B(44) of the Finance Act, 1994 as
amended.
Charge of Service Tax on and after 1.07.2012 is defined under section 66B of the Finance Act, 1994.
Section 66B states that Service Tax shall be charged at the rate of 12% on value of all taxable
services i.e., other than those specified in the negative list or exempted services, which are provided
or agreed to be provided in the taxable territory by one person to another and collected in such
manner as may be prescribed.
Section 66B specifies the charge of service tax which is essentially that service tax shall be levied on
all services provided or agreed to be provided in a taxable territory, other than services specified in
the negative list. Thus, as per charging section 66B, Service Tax shall be applicable on all services
except negative list services or services which are specifically exempt from Service Tax.

title of project educational services

Services relating to Education Sector covered under Negative List

Section 66D of the Finance Act, 1994 contains Negative List of Services. The clause (l) of section
66D relates to education related services. The said clause (l) of Section 66D of the Act provides for
the following negative list services in relation to educational sector:
Services by way of
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the
time being in force;
(iii) education as a part of an approved vocational education course
According to the negative list, there are three categories of education covered under this list and
hence non-taxable:
Pre-school education includes play schools, pre-nursery and nursery schools, crche, day care
centre, pre-kindergarten or any such purpose school or centre by whatever name called.
As per www.newworldencyclopedia.org, Preschool education is education that focuses on
educating children from the ages of infancy until six years old. The system of preschool education
varies widely, with different approaches, theories, and practices within different school jurisdictions.
The term preschool education includes such programs as nursery school, day care, or kindergarten,
which are occasionally used interchangeably, yet are distinct entities. While pedagogies differ, there
is the general agreement that pre-school is responsible for providing education before the
commencement of statutory education. In academic parlance, pre-school / early childhood
education is defined as a pedagogical approach covering the education of children from the period
from birth to six years of age.
Education upto higher secondary school or equivalent includes school education which is up to
higher secondary (12th standard) or equivalent level (say, intermediate). Any education beyond
higher secondary is not covered here. The use of expression equivalent provides wider scope to
school education implying that all education up to school leaving are in negative list. Even if it is
provided by international school providing international certificate, it will be out of Service Tax net.
Education as a part of curriculum leading to recognized qualification unlike school education
where any school education is covered, education qualifies for negative list only if certain conditions
are met, viz,
(i) education must be imparted as part curriculum
(ii) such education should be for obtaining a qualification (say a degree, diploma,
certificate etc.)
(iii) such qualification should be recognized by any law (Indian law only) for the
being in force.

time

If any of the aforementioned conditions is not satisfied, the education shall not qualify to be under
the negative list. The use of words law for the time being in force implies that such laws as are
applicable in India at a given point of time. In such cases, education is imparted under a prescribed
syllabus or curriculum and the education must be imparted as a part of such curriculum, i.e. it must
be a part of syllabus for such course or qualification. However, education leading to foreign
qualifications shall be liable to payment of Service Tax. In Indian, context, it may be noted that
recognition is granted by bodies such as University Grants Commission (UGC), All India Council of
Technical Education (AICTE) etc.
Approved vocational education course Approved vocational education course has been defined
in section 65B(11) of the Finance Act, 1994. These are

a course run by an industrial training institute or an industrial training centre affiliated to the
National Council for Vocational Training, offering courses in designated trades as notified
under the Apprentices Act, 1961. (w.e.f. 10-5-2013, affiliations to State Council for Vocational
Training are also covered)

a Modular Employable Skill Course, approved by the National Council of Vocational Training,
run by a person registered with the Directorate General of Employment and Training, Ministry
of Labour and Employment, Government of India.

a course run by an institute affiliated to the National Skill Development Corporation set up by
the Government of India. (only upto 9-5-2013).

The admission / examination fee is covered under negative list. Further, tuition fee or development
fees are also not liable for Service Tax. When students avail the services of admission / development
/ examination and pay the fees in respect of such services alongwith basic tuition fee, it may be
considered as a case of bundled services where tuition is having dominant nature covered under
negative list and accordingly, all other fees charged mandatorily along with tuition fees would not be
liable for service tax.
1. Services not in Negative List
Negative list may, therefore, not include
a)

Private tuitions

b) Education as a part of prescribed curriculum for obtaining qualification recognized by law of a

foreign country
c)

Services provided to educational institutions (except covered elsewhere)

d)

Placement services

e) Services provided by educational Institutes such as IITs, ITMs charge a fee from prospective
employers like corporate houses / MNCs, who come to the institutes for recruiting candidates