GST on Training and Counselling of students with Dyslexia
A question has been raised whether GST is applicable on fees charged by a charitable trust registered under 12A, 80G and working in the field of training, counselling, etc., of students with Dyslexia.
We refer to schedule entry No.1 of Notification No.12/2017-CT (Rate), commonly referred to as the exemption notification, reproduced hereunder for ready reference –
| Sl. No. | Chapter, Section, Heading, Group or Service Code (Tariff) | Description of Services | Rate (per cent.) | Condition |
| (1) | (2) | (3) | (4) | (5) |
| 1 | Chapter 99 | Services by an entity registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by way of charitable activities. | Nil | Nil |
The above exemption is fairly clear. Services which are rendered by an entity registered under section 12AA of the Income tax Act 1961 are exempt so far as they satisfy the definition of ‘Charitable activities’
Charitable activities are defined under the same notification, as under –
“charitable activities” means activities relating to—
(i) public health by way of ,—
(A) care or counselling of
(I) terminally ill persons or persons with severe physical or mental disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming substance such as narcotics drugs or alcohol; or
(B) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes or skill development relating to,—
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife;
As you will note that mental disability is covered under definition of charitable activity vide clause (i)(A)(I).
Further, we refer to The Rights of Persons with Disabilities Act, 2016 wherein under Schedule Entry 2(a) dealing with specified learning disabilities, dyslexia is covered under the category of intellectual disability. The relevant schedule entry is as under –
Schedule entry 2(a) – “specific learning disabilities” means a heterogeneous group of conditions wherein there is a deficit in processing language, spoken or written, that may manifest itself as a difficulty to comprehend, speak, read, write, spell, or to do mathematical calculations and includes such conditions as perceptual disabilities, dyslexia, dysgraphia, dyscalculia, dyspraxia and developmental aphasia;
In view of the above and subject to other applicable rules in this regard, the activity of the trust by way of care and counselling of severely dyslexic children would be eligible for exemption under GST.
Readers will note that while under section 80-U of The Income Tax Act, 1961, a definition of ‘disability’ (40% or less disability) and ‘severe disability’ (80% or more disability) is provided, no such distinction exists under GST laws. Hence, the question remains as to classification of dyslexic children under ’Severe disability’. The government should issue suitable clarification in this regard.
Readers may also note that services of providing education forming part of curriculum (such as school, colleges etc.) will also be exempt vide entry No.66 of Notification No.12/2017-CT(Rate).
There are many trusts and NGOs rendering invaluable services to persons with disabilities, needless to state, GST exemption on such services will make their services more accessible and affordable to the public in general.
Questions or comments of readers on this article are welcome.
Dipen Lathi,
Chartered Accountant
www.Lathico.com
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