GST on Coaching Not a Luxury Tax, Says Federation in Pre-Budget Appeal
Ahead of the Union Budget 2026, the Coaching Federation of India (CFI) has submitted a detailed representation to Union Finance Minister Nirmala Sitharaman seeking rationalisation of the Goods and Services Tax (GST) on coaching and supplementary education services. On behalf of thousands of coaching institutions across India, the federation has flagged the existing tax structure as a growing burden on parents, students, and small coaching centres.
In a letter dated January 28, 2026, the federation acknowledged the government’s emphasis on education and skilling for India’s youth. It highlighted that the prevailing GST regime has created a policy contradiction by adding taxes in formal supplementary education. It has increased the cost of learning and caused hardship, particularly for middle-class families.
The letter reads, "We acknowledge the Government of India’s continued emphasis on education and skilling for India’s youth. However, the prevailing GST regime on coaching services has unintentionally created a policy contradiction where formal supplementary education is taxed, thereby increasing the cost of learning and creating hardship particularly for middle-class families."
Key demand: Reduce GST on coaching services
One of the main demands is reduction in GST on coaching services from the existing rate to 5 per cent or NIL. The letter reads, "Coaching is not a luxury. In today’s competitive environment, coaching has become an essential support system for students preparing for board exams, JEE, NEET, CUET, CA/CS/CMA, CLAT, SSC, banking, UPSC, and other public examinations. It is our humble submission that education-related services should be treated at par with education, not as a consumption service."
Exemption threshold and MSME concerns
The federation has also asked for an increase in the GST exemption threshold from Rs 20 lakh to Rs 1 crore for coaching and supplementary education services. It pointed out that the existing threshold was set when operating costs were significantly lower. In past two decades, the costs related to rent, salaries, electricity, technology, marketing, and compliance have risen sharply. Request is to increase exemption threshold under GST from Rs.20 lakh to Rs.1 crore for coaching / supplementary education services, to provide level playing field and MSME survival.
“Current structure pushes institutions into informality and a balanced GST policy can ensure affordability, equity and compliance together — while strengthening India’s human capital.” Vice president PR Ashish Gambhir
