Dear Students,
LAST WEEK WE ASKED: Do you think education institutions should be kept out of service tax purview?
BEST RESPONSE
The educational loan given by banks is still not a preferred option for parents due to high interest rates and repayment of the interest right from the commencement of the course. Students opting for educational loans also have to shell out higher amounts due to service tax component. Undergraduate/postgraduate course fees are also rising. On one hand, the government encourages people to take education through various schemes and on the other hand makes people pay service tax on education courses. The service tax is not small. It is 12 per cent, which is very high for students opting for any course.
Anand A Wadadekar, SAMVIT School of Infrastructure Business, Pune
OTHER RESPONSES
Educational institutes should be tax-exempted, as innovation and development takes place only by increasing the country's literacy rate, which in turn, can be achieved only by establishing educational institutes.
Srujan Kumar Bommena, National Institute of Construction Management and Research, Pune
Educational Institutions should be kept out of the service tax. The catch in the recent tax law is that auxiliary services come under the service tax payables. If all the auxiliary services like hostel facilities, canteen facilities, text books, extracurricular activities etc come under the service tax umbrella, then the definition of education itself is compromised as the above facilities have essentially become part and parcel. Thus, the stakeholders (parents and institutions) are trapped in a catch-22 situation. To mask themselves from service tax, fees would be increased which would directly impact the wallets of parents.
V Sunil Babu, Xavier Institute of Management and Entrepreneurship, Bangalore
The government looks upon schools and colleges as commercial entities, since schools these days are inclined towards profit making. Hence, the educational institutions are under the tax purview. But, schools indirectly impose the tax burden on parents. It would be wise if the government identifies the schools which are profit-oriented, running in the name of charitable trustees and, impose service tax only on them rather than on the small and medium-scaled private educational institutions.
Mithun J B, Xavier Institute of Management and Entrepreneurship (XIME), Bangalore
Education has become a lucrative business nowadays, but still, morally, education is the right of every citizen. On one hand, the government promotes 'Sarva Shiksha Abhiyaan', and on the other, it collects service tax, which tantamounts to promoting education as a business. We need to set our priorities right. Imposing service tax would mean indirectly burdening citizens for what ought to be free, ideally.
Dawood Ghasletwala, Institute of Management Technology, Ghaziabad
If we want to protect the education system from becoming a business, we should not allow it to become tax free. Hence, education institutions should not be kept out of service tax purview.
Jagdish Dangi, UIT, RGPV
Keeping education institutions out of service tax would alleviate the burden of heavy education expenditure on parents, who feel the pinch by paying high fees for their children as the burden of the service tax is ultimately passed on to them by the institution.
Jatin Kashyap, Post Graduate Government College, Chandigarh
Education is the backbone of the knowledge economy, which is the global image India has today. Levying taxes would only enhance the already costly setup of education in this country considering the average income of Indians. The education sector is in dire need of investment from the grassroots to the higher education level and should be kept out of the tax horizon.
Swar Grover, GNDU, Amritsar
The education sector is one of the areas whose output forms a major resource for the industry. Additional service tax on them would only hamper their efforts. It would be vicious if the institutes, in turn, pass on this extra burden to parents. It is time for the government to realise that by minimising tax on educational bodies the job market would be indirectly benefited. And the thriving industrial sector would yield much better returns in comparison to the revenue earned by levying service tax.
Shivam Chhabra, Integral University, Lucknow
Today, education is not a noble philanthropic industry but a full fledged money-making sector. The government should levy nominal taxes which should be given back for the betterment of this sector.
Anika Duggal, Jammu University
In today's world, the education sector has become a huge industry. Be it corporate houses, industrialists or big politicians, they invest heavily in the education sector. Going by the current trend, the education sector is a minting machine. Educational institutions should surely not be tax exempt.
Nilaya Mitash Shanker, IIT Roorkee
There are certain services which an educational institution provides. Such services might attract service tax. However, in relation to services provided, there is utter confusion in schools as to which needs are to be removed. For example, where a school charges separate tuition fee, library fee, exam fee, sports fee etc, it might not be liable for service tax as school education is in the negative list. In such a case, we cannot say tuition fee is free from service tax but other fees are not. In fact, all such fees are part of school education.
Pratik Bairagi, Regional College of Management, Bhubaneswar
Your responses should reach us at edu@business-standard.com by Monday evening every week. Please ensure your responses do not exceed 100 words. Avoid attachments and email your full name, institute's name, batch and complete mailing address. The student who gives the 'Best Response' will be awarded Rs 500.
THIS WEEK'S QUESTION: Do you think the IITs should rethink on the new IIT-JEE pattern and change the same?
For other responses, please log on to http://www.mybs.in/9a907
