9th August 2017
Subject: An urgent plea on behalf of all Higher Education Institutes, Students and Parents.
Shri Narendra Modi Ji
Hon’ble Prime Minister of India
New Delhi 110001
Most Esteemed Hon’ble Prime Minister of India,
Greetings from IFIM Law College.
At the outset, we would like to congratulate your esteemed self and the Cabinet for the implementation of the unified Goods and Services Tax regime.
I am writing this open letter on behalf of all Higher Education Institutes in the country that are being plagued by this issue.
India has the largest and fastest growing student market with 19.1% of the population in the age bracket of 15-24 years. Currently, India’s Gross Enrollment Ratio is pegged at 21.1% , access to higher education in India is limited to a restricted population.
The Government has set a target of 30% Gross Enrollment Ratio by 2020, which seems difficult to achieve with the new developments.
In the future, the country will face a huge demand for jobs, which will be affected by robotics and Artificial Intelligence. In such a context, it is even more essential for students to attend degree programs, get necessary qualifications and develop skills to avoid redundancy.
Under the new GST regime, there is zero tax liability on students in Higher Education Institutes but, perhaps inadvertently the services provided to Higher Education Institutes such as maintenance, housekeeping, security, catering etc. are taxable at 18 percent under the GST Act. This imposition clearly reflects a distinction between the tax treatment meted out to schools and Higher Education Institutes. While, Schools have been placed in the tax free zone, Higher Education Institutes are expected to pay taxes under the GST regime.
In addition to this, Institutes will further be burdened to necessarily pay taxes on behalf of non-registered service providers. This will affect Private and Government Institutes alike.
As reported in the Report of the National Fees Committee appointed in 2014, Fees comprises of the following components: Tuition fees, Development fees, Examination fees and other fees. These components include costs pertaining to Human Resources, Learning Resources, Computers, Operational Costs, Maintenance Costs, outreach costs and placement expenses.
In the event that Education Institutes are not exempted from paying GST for auxiliary services, Higher Education Institutes will be compelled to increase their fees to neutralize the excess expenditure. The Government will face the burden too as Government Institutes will either have to increase their fees or increase their demand of funds from the public exchequer.
In light of the above, we call upon the GST Council to reconsider their decision of imposing taxes on the services provided to Education Institutes. Higher fees will deter students from pursuing higher education and restrict the flow of foreign students coming to India.
We would be grateful if the following assistance can be offered to us from your esteemed good self and the Prime Minister’s Office:
– We will be grateful if this decision can be reconsidered and these services offered to Higher Education Institutes can be exempted from these unintended levies on auxiliary services.
Sir, this step will most definitely be a step forward in the right direct and help all of us realize our dream to ensure education for all members of the Indian youth population. Let us make higher education a right for all.
Thanking You, Sir.
With profound regards,
Member, Centre for Developmental Education
 http://mospi.nic.in/sites/default/files/publication_reports/Youth_in_India-2017.pdf , last accessed on 4th August 2017.