In the current times when both parents have successful careers, daycares for children have become a necessity. As people have moved to metros, nuclear families have become the norm. The previously-available support of parents and relatives is not possible in most cases.
These days, daycare centres are full-fledged educational centres where children learn everything from life skills to sports. They expose the children to a variety of activities and help them in becoming independent from an early age.
If you are planning to open a daycare centre, you may want to apprise yourself of the compliance and safety regulations. While some of these are mandated by the government, a few others have become popular due to the increasing demand from parents.
Let’s understand the reality of GST for daycare services.
What Is GST?
In simple words, Goods and Services Tax is the indirect tax that has replaced most indirect taxes that existed earlier in India. It is the tax that is levied on the supply of goods and services and is categorised into four broad categories.
As is the case with any other business, it is also essential to understand your tax obligations to avoid any unnecessary fines and license issues. There are various online gst calculator india that can help business owners with this task.
What Is Considered As An Educational Institution In GST?
When the GST law was announced, it was a general misconception that the childcare services would attract the tax of a whopping 18%. It was followed by many debates as it is a necessity and was being taxed at the rate of luxury services.
While GST law does not specify the clear meaning of education, it clarified the definition of educational institutions in the notification dated 28.06.2017. It defines an education institution is an institution that offers the following services.
- Pre-school education and education up to higher secondary school or equivalent
- Education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force
- Education as a part of an approved vocational education course
What Is The GST Applicable For Educational Institutions?
The same notification, as stated above, clarified that all educational institutions up till higher secondary school are exempted from GST. It includes all the output services as well as other specified services that the educational institution offers.
However, one needs to understand the fine differences between a creche and a daycare centre. A creche is a place where mothers can leave their infants for care while they can go to work. There is no education being imparted in creches.
On the other hand, a pre-school or a daycare centre is where a child learns, and a pre-school may extend into a creche after the school hours. Hence, understanding the fine differences in the objective of the institution is essential in this case.
To summarise, a daycare centre is not liable to pay GST. However, you may still want to complete your gst registration procedure.
What Are The Other Key Aspects Of Running A Successful Daycare?
To make your daycare a resounding success, here are the steps that you can take.
Any school is as good as the teachers. Onboard the best teachers who can build an instant connection with kids and have prior experience in working with them. Teachers who understand the psychology of little children can not only manage them better but also encourage them to learn.
Make the institute a visual treat for children as they like to play with colours and textures. Moreover, it should encourage the children to express. Install stations and get toys and books that can enhance sensory learning. Make sure that the institute has low-seating furniture that can be easily approached by children.
Ensure proper safety and cleanliness within the school premises. A lot of parents insist on live cameras with connectivity to their mobile phones. You may want to analyse other similar requirements.
Professionally managed and reliable daycare centres allow working parents to concentrate on their work without worrying about the safety of their children. It has become a lucrative business for people who would like to invest in the growth and development of children.
Running a daycare centre can be a fulfilling business by connecting you to the innocent world of children. By using the information given above, you can ensure all the necessary steps to make it successful.