GST Impact on Distance Learning Higher Education
The importance of education in India can’t be underestimated due to the majority of the population below 25 years of age. Due to the large base of population and poverty Education should be easily available at less cost but because of implementation of GST (Goods and Service Tax) the regular higher education has been made costly and the same impact is replicating in Distance Education.
Distance Learning is an important part of Indian Education System where youngsters are looking for a job rather than regular education so that they can do the job along with their education to support their family. GST impact on higher education has made Distance Education costly due to increase in the cost of auxiliary services like admission related activities which are mostly outsourced by all Universities and institutions.
Earlier these services were exempted but after implementation of GST from July 1, 2017, these services are no longer exempted and because of this impact many universities have increased their fees or will do that soon. The rate of GST is 18% which has been fixed by Government on all the auxiliary services related to Higher Education.
The cost of education is increasing but income levels have seen a slowdown recently making it complicated for youngers to pursue education along with their jobs.
Education Promotion Society of India:
A not-for-profit organization which represents over 300 private universities and 3,000 colleges, recently petitioned the government to scrap GST for higher education institutions earlier this month.
“Since these services are currently paid by users directly to vendors, GST levy will create a financial burden on them and also lead to an escalation of the cost of higher education,” said EPSI. They are considering regular education but it has a direct impact on Distance Education also as major universities have information centres for admission related activities which are covered under 18% GST.
EPSI delegation has met Union Finance Minister Shri Arun Jaitley couple of times to look into this issue but nothing positive came out till now and they have requested to scrap GST of Higher Education.
Top universities which are offering Distance Education courses are Amity University, Annamalai University, NMIMS University, ICFAI University, SGVU, UPES, IGNOU etc and the courses which generally professionals opt are BBA, MBA, BCA, MCA with many specializations. These students and professionals don’t have many options to choose from due to recent Distance education guidelines implemented by UGC and available ones have become costlier.
T.V. Mohandas Pai, the chairman of Manipal Global Education, argued that the government must stick to its position that it will not drag the education and health sector into the GST tax-net.
“It is high time that the government realize that educational institutions, be it schools or HEIs come under the same social sector and is not a business. When schools were considered and exempted, the government had to give the same consideration to HEIs as well, which would have avoided such a situation,” he said to the Deccan Chronicle.