If Taxed Under GST, Pvt Education Cost Could Increase 2-3%

By: Admin 01 April, 2017

Private education could cost 2-3% more if taxed at the lowest slab of 5% under the Goods and Services Tax (GST), according to analysis



The GST bill passed by the Lok Sabha on March 29, 2017 carries a provision that says certain services provided by the government or local authority would not be liable to tax.

 

Financial experts believe that the provision was inserted to exempt education and health services when provided by the government or the local authority. The provision could be extrapolated to mean that private education in India would be liable to tax once GST becomes law.

 

 

 

Tax exemptions have been granted to both public and private institutions engaged in providing education. Extending exemption benefits to private schools, considering their commercial success, has not always been an idea that found mass support.

 

GST is an indirect tax–a tax on consumption of goods and services. An inherent feature of indirect tax is that the burden of the tax, rather than being borne by the industry (i.e., the manufacturers or traders or service providers), is passed to the consumers. So, GST on private education, if it is implemented, would be borne by those looking to avail education services.

 

Education, once viewed largely as a philanthropic activity, has now metamorphosed into a $100 billion (Rs 6.5 lakh crore) industry, with the private sector balancing investor returns and social responsibility, while the public sector is struggling with inadequate faculty and outdated curriculum.


This news article was taken from ‘India Spend’. Read the original article here.