Education Institute Registration

Procedure for Registration of Educational Institution

To start an Educational Institution (Schools/ Colleges) can be a long, tiring, expensive, and gruesome process in India. Further, there are several licenses, permissions, and registrations one needs to take care of before venturing into this domain.

1. Registration of School/College Institution

The first and important step in the establishment of an educational institution is the registration of the institution. Likewise, as per the Constitution of India, education institutions have to be registered under the name of Trust or Society only. However, private institutions can also set up the institution under section 8 of the Companies Act, 2013.

Registration of Land/Premises

  1. Further, if an individual has landed in his/her name, then NOC from the State Education Department should be obtained.
  2. Further, if any land has to be purchased from the Government for an established Educational institution then a no-objection certificate is referred to as the Essentiality Certificate (EC) from the concerned state’s Department of Education. Likewise, society will require a Letter of Sponsorship as well from DOE( Department of Education). Moreover, which has to be sent to the e land-owning agencies, like the Municipal corporation of the area. Additionally, the land is sold at subsidized rates by the land-owning agency
  3. List of Documents required for registration of an educational institution:

  • The application for EC a fee of Rs. 500
  • Memorandum of Association,
  • Moreover, Affidavit regarding the relationship of society members,
  • Further, copy of Reserve Fund for Rs. 2 lakhs from the bank,
  • Additionally, an affidavit from management regarding the proper operation of the school, as per Delhi School Education Rules, 1973,
  • Additionally, undertaking regarding fees and other charges,
  • List of members of society with full particulars,
  • Moreover, details of land and building,
  • Similarly, Project report of the proposed school,
  • Further, the experience of society/members in the field of education,
  • Scheme of Management,
  • Further, documents regarding the ownership of land allotted to school,
  • Auditor’s statement of account(s),
  • Additionally, Staff statement as Performa,
  • Further, Rates of fee and other fund charges,
  • Likewise, Enrolment of students.

4. Licenses to be obtained for starting an educational institution:

  • Registration Certificate of Society – Societies Recognition Act, 1860,
  • Essentiality Certificate DoE,
  • Further, Certificate of Recognition MCD/ DoE,
  • Moreover, Certificate of Upgradation DoE,
  • Further, Certificate of Affiliation CBSE,
  • Certificate of MCD
  • Similarly, Certificate from UGC
  • Likewise, an affidavit regarding the proper purchase of land and no violation of master plan in the land used,
  • Further, the MCD/Development Authority of the Concerned State,
  • Similarly, Site Plan of the Building/Sanctioned Building Plan approved by MCD/DDA,
  • Additionally, building Fitness Certificate MCD,
  • Additionally, Health Certificate MCD,
  • Further, water Testing Report The water board of the concerned state,
  • Additionally, completion Certificate DDA,
  • Similarly, duly approved Scheme of Management DoE,
  • Further, no Loan Certificate against FD issued by the bank Bank,
  • Hence, Land Use Permitted Certificate (in case of rented land) Landlord.

Various business models in the education sector

Business models Investment Compliances
Traditional schools/ universities (classroom learning)   The procedure given above has to be followed.
Coaching centres – offline   1.      Registration of the institute2.      Obtain trade license

3.      Moreover, open a current account

4.      Shop and establishment license

Edtech startups – online courses/ tutorials/ coaching classes   1.      Registration of Start-up2.      GST compliances

3.      domain name registration

4.      Further, IPR registrations

5.      enter into agreements – non-disclosure, IP agreements, service agreements

6.   Further, payment compliances

 

Taxation Regimes under the Income-tax Act, 1961

Type of registration Taxation guidelines
Charitable trust Additionally, the trust must apply for a PAN card as it is a must for income tax registration with the income tax department, Government of India.Moreover, after the trust has received the income tax certificate under section 12A, it can apply for various tax exemptions for donors as well. Additionally, it can be under Sec 80G for 100% subject to conditions.
Society under Societies Act, 1860 As per the provision of sec 12A of the income tax act, the income of an organization is exempted if an NGO has 12A registration. further, if the registration under section 12 A is not done, the NGO or organization must pay income tax on the surplus income during the year. Additionally, this registration under section 12A is a one-time registration.
The Company under Section 8 of the Companies Act, 2013 The taxation system is the same as trust and society.
Sole proprietorship In this case, taxation is done on the name of the individual in whose name the institution is registered.
Government Institutions Those educational Institutes which are wholly or substantially financed by the Government (either Union or State) are exempted from payment of taxes under section 10(23C) subclause iii(ab) of the Income Tax
Service tax registration The Indian government requires service tax if it expects that the turnover would be more than 9 lakhs.

 

Taxation system under the GST regime

  • Where the educational institution is providing only education as a service then such fees are chargeable at NIL rate and such educational institutions are not required to be registered.
  • Additionally, where educational institutions providing other supplies or other services, i.e., providing books to students, providing shoes or uniforms, etc to students than in such cases such institutions liable to get themselves for registration.
  • Further, services that provide to higher education institutions will be taxable. While services by an educational institution is out of the GST ambit, the same is not the case with services to an educational institution.
Description of service Rate of GST
Education Services 18% ( 9% Central Tax + 9% State Tax
Technical aids for education, rehabilitation, vocational training, and employment of the blind such as Braille typewriters, braille watches, teaching and learning aids, games and other instruments and vocational aids specifically adapted for use of the blind Braille instruments, paper, etc. 5%
Instruments, apparatus, and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses. 28%