07 July 2024
In the context of GST, the applicability of tax on renting or leasing of immovable property depends on the nature of the transaction and the type of property being rented or leased. Here's a detailed look at the GST implications for building premises let to government schools for children.
### GST on Renting of Immovable Property
As per GST law, renting of immovable property is generally considered a supply of services and is subject to GST. However, there are certain exemptions and clarifications provided for specific scenarios.
### Exemptions Relevant to Educational Institutions
The Central Goods and Services Tax Act, 2017, and various notifications provide certain exemptions related to educational institutions. Here’s what you need to consider:
1. **Notification No. 12/2017-Central Tax (Rate) dated 28th June 2017**: - **Entry No. 66**: Services provided to an educational institution by way of renting of immovable property are exempt from GST.
2. **Definition of Educational Institution**: - As per the notification, an "educational institution" is defined to mean an institution providing services by way of: a. Pre-school education and education up to higher secondary school or equivalent; b. Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; c. Education as a part of an approved vocational education course.
### Applying the Exemption to Government Schools
- **Government Schools**: Government schools providing education up to higher secondary school or equivalent fall under the definition of "educational institutions" as per the above notification. - **Renting of Property**: If the premises are rented out to a government school that provides education up to higher secondary level, the services provided by way of renting the property to the school would be exempt from GST.
### Conclusion
Based on the above provisions, renting building premises to government schools for children is exempt from GST, provided the school falls under the definition of an "educational institution" as outlined in Notification No. 12/2017-Central Tax (Rate).
### Supporting Clauses and Notification
1. **Notification No. 12/2017-Central Tax (Rate)**, Entry No. 66: > "Services provided to an educational institution, by way of, renting of immovable property."
2. **Definition of Educational Institution**: > An institution providing services by way of: > (a) Pre-school education and education up to higher secondary school or equivalent; > (b) Education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; > (c) Education as a part of an approved vocational education course.
To summarize, if you are renting out building premises to a government school for children (an educational institution providing education up to higher secondary school), this service is exempt from GST. It’s advisable to keep documentation proving the nature of the educational services provided by the tenant to support the exemption claim.
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