WILL GST MAKE HIGHER EDUCATION EXPENSIVE?
IMPACT OF GST ON HIGHER EDUCATIONAL INSTITUTES DECODED
Education cannot be undermined in India where half the population is below 25.In future the country would need to satisfy huge demand for jobs which could be denominated by artificial intelligence and robotics. Role of education is to prepare an individual physically, mentally and emotionally to attain objectives effectively. Educational abilities helps to find a fruitful profession. Education helps to believe what we hear. Higher education enables opportunity for social mobility and move up on economic ladder.
Educational institutions operate under no profit scheme. There has been fantastic change in number of institutes and colleges. India has been an attractive force for the scholars around the world. India has more than 17,000 colleges, 500 universities and 13 institutes of national importance which provide a platform for students to develop their skills through education. Indian higher education is third largest in the world and is likely to be on top in future. Higher education offers greater number of occupation as compared to past secondary school.
Educational institutions provide services which are relieved by GST council, though the services are not free of tax (GST). Higher educational institutions availing wide range of services have to pay GST, which weakens the GST target. Services which are being provided to educational institutions were previously considered as “auxiliaries “which did not invite service tax was later regulated .Services which are being provided to education institutes are chargeable. Services which educational institutes provide are out of GST ambit. Exemption is accessible to schools only till 10+2. Services such as housekeeping, catering, admission procedure or organization of examination to higher level institutions will uphold GST though service of education in case is tax free.
Educational institutes would probably sustain heavy outflow of money in comparison with schools. Goods and services bought from un-registered dealers would make a hit with GST.In such case institutions would obey the formalities and would pay the tax. Australian management is broad in GST management worldwide as it wraps nearly all goods and services and allows very few liberations in case of education which remains free of GST. Educational institutes are zero rated and can recompense against the taxes funded. Similar norm is adopted by South Africa. Higher cost will be added for Students coming from 165 foreign as well as neighboring countries such as Nepal followed by Afghanistan and Bhutan.
Approx. 3 lakh Indian students are studying abroad according to Mobility report. Approx. 45,000 students registered in India (2015-2016) according to information of Union Ministry of HR Development. Educational institutes in India are emerging with foreign collaborations and providing globally recognized education. Higher level of education is essential for higher economic growth and higher GDP.
Institutions such as Bennett University collaborated with Georgia Tech, BML Munjal with College in London (Imperial) to provide higher quality of education. Lower tax cost would permit institutions to expand their organization and earn limited. Indian educational institutions have potential to fulfill ambition of Indian students and attract foreign students.
Comments ( 5 )
Yes gst make higher education expensive but most of the institute service exempted like primery school education etc
1. Higher Education Institutions and Private Institutions
The exemption under GST has been granted just for pre-schools till higher secondary education and since universities and other advanced educational institutions have not been mentioned in the exception list, and thus GST of 18% is expected to be levied on this.
Higher education in the private segment will end up being more costly and in turn, rivalry for admissions in government schools/colleges/foundations will increment. There will be a 3 to 5% of the obligation jump on the cost of administrations that will over the long haul impact the common man. The burden will be the most on middle class families who obtain education loans or put their life-long savings into educating their wards at reputed institutions.
2. Coaching Institutes
Coaching institutes form an integral part of education today as clearing competitive exams and entrance exams seems just impossible without taking professional coaching on how to clear and attempt them. GST has raised the rate of taxes to 18% from 14% for these coaching institutes. This will be a burden for all parents whose child is about to start coaching for IITs and other competitive examinations.
3. Cost of Organizing Events
Any educational/training events organized in India by foreign entities which are attended by professionals, individuals and overseas participants as well would be taxed under GST.
educational institutions
The education services provided by the below are also exempted from GST:
1. National Skill Development Corporation set up by the Government of India
2. Sector Skill Councils approved by the National Skill Development Corporation
3. Assessment agencies approved by the Sector Skill Council or the National Skill Development Corporation
4. Training partners approved by the National Skill Development Corporation or the Sector Skill Council are also included w.r.t the following programs:
(a) the National Skill Development Programme implemented by the National Skill Development Corporation
(b) a vocational skill development course under the National Skill Certification and Monetary Reward Scheme
(c) any other Scheme implemented by the National Skill Development Corporation”.
“Education is the most important facet of our economy and the government should reduce the taxes related to this sector. Higher education is also a requisite part for studentsso; the amendments should be such that they promote higher education for all. When it comes to taxation, we hope that the government continues to keep education in a secured zone” says GeetaVarshneya, Education Director, Khaitan Public School.
In order to promote the advancement of education sector, the government has offered relief on education based goods. The officials suggest that stability in the sector would be recorded for the initial stretch but there is still no clarity about the GST for upcoming years.
“Education at all levels should be least burdened as it’s already the most important considered section in our nation. For the past so many years, we have been witnessing the advent of schemes promoting literacy rate in various regions of our country. Thus, GST rate should be in line with the schemes promoting education for all,” said Anita Choudhary, Vice Principal, DPS Raj Nagar Extension.
GST is still a puzzle for students like me. I hope it will benefit the students in making their studies cheaper