The government’s new GST 2.0 system is making taxes simpler, bringing both good and mixed news for education. Great news for parents: school fees won’t see new taxes, and notebooks just got cheaper. However, families spending on coaching classes and online courses will continue to pay the hefty 18% GST.
WHAT’S CHANGING WITH GST 2.0?
Starting September 22, 2025, India’s complicated tax system gets a major makeover. Instead of five different tax rates (0%, 5%, 12%, 18%, and 28%), the new system mainly uses just two rates: 5% and 18%.
Essential items stay tax-free, while luxury goods face a hefty 40% tax.
This will reduce confusion and make tax collection easier for everyone.
SCHOOL AND COLLEGE FEES: NO CHANGE, STILL TAX-FREE
The biggest relief for parents: regular school and college fees remain completely tax-free. This core principle of GST continues unchanged, covering:
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All government and private schools (from pre-school to Class 12)
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University degree programmes and recognised courses
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Student transport and mid-day meals provided to schools
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Vocational training programmes recognised by the National Skill Development Corporation (NSDC)
Parents won’t see any GST added to their children’s admission fees or monthly school fees. The government has maintained its commitment to keeping formal education affordable.
BIG RELIEF: SCHOOL SUPPLIES GET CHEAPER
Here’s excellent news for parents buying school supplies. Many educational items that previously carried 12% GST are now completely tax-free.
Now 0% GST (was 12%):
Now 5% GST (reduced rates):
Real Impact: A family spending Rs 2,000 on notebooks and stationery will save Rs 240 annually (the 12% tax they used to pay). For geometry boxes, the tax burden drops from 12% to just 5%.
BUT COACHING CLASSES STILL COST MORE
Here’s where expenses remain high. Coaching centers, tuition classes, and online learning platforms still charge 18% GST. This continues to burden families:
- JEE/NEET coaching: 18% tax continues
- Online courses from edtech companies: 18% tax
- Private tutoring services: 18% tax
- Test preparation classes: 18% tax
For a Rs 50,000 coaching course, parents still pay an extra Rs 9,000 as tax – a significant burden for middle-class families preparing for competitive exams.
HIDDEN IMPACT: SCHOOLS MAY FACE MIXED COST PRESSURES
While schools don’t charge GST on fees, they pay taxes when buying supplies and services. Under GST 2.0, the impact varies:
Potential Cost Increases:
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Software and IT services: Mostly 18% tax
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Security services, cleaning: Could see rate changes from 12% to 18%
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Repairs and maintenance: Mixed impact
Potential Cost Decreases:
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Some educational materials: Now cheaper or tax-free
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Basic supplies: Reduced tax burden
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Since schools can’t recover these taxes (because their main service is tax-free), any net increase in costs might eventually lead to marginal fee adjustments, while savings could help hold fees stable.
WHAT PARENTS SHOULD EXPECT
For School Parents:
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Monthly fees remain the same in the short term
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Save money on notebooks, pencils, maps, and basic stationery
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Slight fee increases possible if schools face higher operational costs
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Net impact likely neutral to slightly positive
For Coaching/Tuition Parents:
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Continue paying 18% GST on all coaching fees
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Save money on test prep books and study materials
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No relief in sight for expensive coaching programmes
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Online learning platforms remain costly due to tax
For College Parents:
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Degree programme fees remain tax-free
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Cheaper study materials and supplies
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Executive education programs still carry 18% GST
Immediate Benefits:
Plan Ahead:
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Budget for continued 18% GST on coaching and online courses
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Factor in potential small adjustments to school fees if operational costs rise
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Take advantage of cheaper educational supplies
SKILL TRAINING GETS BIG RELIEF
In a recent move benefiting lakhs of students, the government restored complete tax exemptions for skill development courses recognised by the National Skill Development Corporation (NSDC).
These job-training programs are now entirely tax-free after a brief period of uncertainty in late 2024.
This ensures that vocational training – crucial for employability – remains affordable for students from all economic backgrounds.
THE BIGGER PICTURE: WINNERS AND LOSERS
Clear Winners:
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Parents buying school supplies (significant savings)
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Students in skill development programmes (tax-free training)
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Schools with heavy stationery/basic supply costs
Status Quo:
Continued Challenge:
The new system maintains a clear policy divide: formal education and basic supplies stay protected, while commercial coaching bears the full tax burden.
EXPERT OPINION
“GST 2.0 represents a win-win for basic education,” says Dr. Rajesh Kumar, an education policy expert.
“Parents save on supplies, schools get administrative simplicity, and formal education remains protected. However, the 18% tax on coaching continues to be a concern for families preparing for competitive exams,” he adds.
WHAT INSTITUTIONS SHOULD DO
Educational institutions are advised to:
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Review vendor contracts for any GST rate changes
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Recalculate operational costs based on new input tax rates
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Consider passing supply cost savings to parents
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Stay updated on government clarifications
LOOKING FORWARD
The GST 2.0 reforms represent the biggest change to India’s tax system since 2017. For education, the changes are largely positive – simpler administration, cheaper supplies, and protected core services.
The government’s approach continues to prioritize accessible formal education while treating commercial coaching as a market service.
This policy choice has significant implications for educational equity, especially in India’s competitive exam landscape.
With GST 2.0, the education sector gets a mixed but largely positive outcome: administrative simplicity, cheaper school supplies, stable fees for formal education, but continued tax burden on private coaching.
The overall impact favors basic education accessibility while maintaining the existing challenges around competitive exam preparation costs.
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