Higher Education to get dearer due to GST says Dr. B.P Sabale, Former Vice Chancellor, YCMOU

Updated: 23 Nov 2017 07:05 PM

New Delhi [India], Nov 23 (ANI): The GST Council's decision to not exempt the services provided by educational institutions to its students will dilute the objective of keeping Education outside the GST ambit.

Higher educational institutions will have to pay GST when providing a wide range of services, like transportation, catering, house-keeping, admissions, or examinations conducted off-campus for their students.

Many higher educational institutions boast sprawling campuses, some of which host residential students as well. These institutions are likely to incur additional heavy expenditures on some of the services, like security, housekeeping, or catering, as these services will be charged 18% GST. In such a scenario, in all probability, these institutions will pass this tax burden on to the students, thus making higher education more expensive.

Students will also have to pay more for laundry, food in the hostel mess, medicines, stationery, and other services and products they buy on the campus. All such services will now attract a levy of 18 percent.

To put it in figures, if the fee of a professional course is Rs. 5 lakh, the student will now have to pay roughly Rs. 25,000 more. The burden will be the most on lower middle-class families, who opt for education loans or put their life-long savings into educating their wards at reputed institutions.

Dr. B.P Sabale, Former Vice Chancellor, Yashwantrao Chavan Maharashtra Open University (YCMOU) said, "In a country like India which has a young population the Gross Enrolment Ratio (GER) of the students pursuing higher education is currently at 23 per cent, which mean that 77 per cent of student are still out of the purview of receiving higher education and with GST being imposed on higher education the GER is bound to reduce even further. Hence the Government and the GST council should take necessary measure to ensure that quality education should be provided to all."

Highlighting their concerns on the issue, a student from Vivekananda Education Society's Institute of Technology (VESIT), Mumbai, who avails hostel services, said "GST on higher education services will definitely have an impact as I will have to shell out more money for utilising the additional services provided at the campus. My family has taken a loan against our home to ensure that I get quality education and now, with GST being applicable on higher education services, it will only add to the burden on my family."

"I would like to request the GST Council to consider exempting higher education and its allied services from the ambit of GST to ensure the youth of India are provided the best of education in order to make them employable and ready for the world beyond their campus. It will not only help students from small towns to pursue quality education from the best colleges in India, but it will also help the country grow economically" he further added.

The GST Council needs to consider the taxation system of countries like Australia, which has the most comprehensive GST regime in the world - it covers almost all goods and services and provides for very few exemptions. However, Education largely remains GST-free. Supply of services to educational institutions is "zero rated". In other words, these institutions (as they are GST-exempt) can claim a refund against the taxes paid by them on inputs. Other countries such as South Africa also adopt a similar norm.

The importance of education cannot be undermined in a country like India, where nearly half of the billion plus population is below the age of 25. In the years to come, the country will need to cater to a huge demand for jobs, a challenging prospect in an environment that could be dominated by robotics and artificial intelligence. Jobs will call for creative problem-solving, analytics, and critical thinking. Higher educational institutions that can impart cutting-edge knowledge, at times in collaboration with foreign institutions, are the need of the hour. Hence, the GST Council should exempt higher education and the services provided to these institutions from the GST ambit. (ANI)

This story has not been edited. It has been published as provided by ANI