‘GST Exemption From Education Sector Can Bring More Literacy’

Education sector has been on the miscellaneous side of the Goods and Service Tax (GST) with traditional courses recognized by regulatory bodies exempt from the tax and other non-conventional and training programs being taxed at 18 percent.

Beas Dev Ralhan, CEO & Co-founder, Next Education India told BW Businessworld, “Non-conventional courses were not exempted from service tax earlier and now, a GST rate of 18 per cent shall affect them only marginally. Moreover, input services are allowed for input tax, irrespective of tax category.”

“This will not only minimize the impact but will also extend an opportunity to institutes and service providers to ensure quality education for the students and implement better learning tools so as to give the students the confidence to opt for these courses irrespective of the cost involved.”

Earlier the rate was decided to be 14 per cent and now has been fixed at 18 per cent for non-conventional sources which is seen as a burden. 

Talking about the impact of the tax rate, he added, “The impact should be marginal. Also, non-conventional course decisions are generally not decided by price sensitivity, so chances of the numbers decreasing are less. However, this might impact the overall budget of a student affecting the parents.”

“The tax exemption will certainly help the education sector. An exemption to services or supplies consumed by the education sector will help cost reduction and give multifaceted advantage to the sector in the form of better products and digital learning.”

GST council has reduced rates on school supplies; however it is confined to only a few categories like bags and books, and most of the input services have been taxed higher. Technology has helped effective learning and tax reduction on technology products like digital classrooms, labs and learning apps would be more helpful.

Ralhan added, “The government of India has many schemes in place for ensuring basic literacy for all citizens of the country and the cost is borne by the government. However, any tax exemptions can bring in better systems of learning, which could go a long way in not only improving the literacy rate of our country, but also in molding a competent skill force.”