Private education cost might 2-3% more, if taxed at very cheap slab of 5% under the goods and Services Tax (GST). According to analysis of the bill’s provisions.
The GST bill passed by the Lok Sabha on March 29, 2017 carries a provision that says certain services provided by the govt or local authority wouldn’t be liable to tax.
Financial specialists believe that the provision was inserted to exempt education and health services once provided by the govt or the local authority. The provision may be extrapolated to mean that private education in India would be liable to tax once GST becomes law.
Tax exemptions are granted to each public and private institutions engaged in providing education. Extending exemption advantages to private schools, considering their commercial success, has not continuously been an idea that found mass support.
GST is an indirect tax–a tax on consumption of products and services. an inherent feature of indirect tax is that the burden of the tax, instead of being borne by the business (i.e., the makers or traders or service providers), is passed to the customers. So, GST on private education, if it’s implemented, would be borne by those trying to avail education services.
Education, once viewed largely as a philanthropic activity, has currently metamorphosed into a $100 billion (Rs 6.5 hundred thousand crore) business, with the private sector balancing investor returns and social responsibility. Whereas the general public sector is struggling with inadequate college and outdated curriculum.
This news article was taken from ‘India Spend’. Read here the original article here.