Dismissing conjectures that education will become expensive under the Goods and Services Tax, the central government on Friday said services provided by an educational institution to students, faculty and staff were exempt under GST.

"Such reports that education will become expensive under GST are completely unsubstantiated. In fact, there is no change made in any subject relating to education in the GST era, except to reduce tax rate on certain items of education such as school bags," the Finance Ministry said here in a statement.

Pre-school education and education up to higher secondary school or equivalent education as part of a curriculum for obtaining a qualification recognised by any law for the time being in force and approved vocational education courses, are exempt under GST.

Some of the input services like transport and canteen provided by private players to educational institutions were subject to service tax in pre-GST era and the same is continued in the GST regime.

"Transportation of students, faculty and staff services provided to an educational institution (providing pre-school education and education up to higher secondary school or equivalent) are exempt from GST. Similarly, catering, including any mid-day meals scheme sponsored by the central government, state government or union territory, to an educational institution providing education up to higher secondary school or equivalent, are also exempt from GST," it said. 

"Further, security or cleaning or housekeeping services performed in such educational institutions are also exempt from GST. Services relating to admission to, or conducting of examination by, such institutions, up to higher secondary, too are exempt from GST," it added.

The Ministry said that education up to higher secondary school level does not attract GST on output services and also on most of the important input services. 

Further, services by charitable registered entities relating to advancement of educational programmes or skill development for abandoned, orphaned or homeless children, physically or mentally abused and traumatised persons, prisoners or persons over the age of 65 years residing in a rural area are also exempt from GST.

"Hence, there has been no change in taxability of educational and other services on account of GST," it said.