Universities facing burden of GST

Amaravati: Universities, colleges as well as regulatory bodies such as AP State Council for Higher Education (APSCHE) and finally students are facing the heat of GST as the Union government imposed 18 per cent of service tax on services to those institutions.

As the Union Finance Ministry ignored the appeals of universities and limited the tax exemption on services to the level up to higher secondary level, 18 % of more tax will have to shelled out by universities and students.

The heat has already hit the APSCHE. The regulatory body is forced to pay 18 per cent service tax for taking services from a corporate company for conducting APEAMCET online examination in May.

“We did not have an idea on the 18 per cent more tax till we received bill from the private company,” said a senior officer of APSCHE.

The universities across the country have been opposing the 18 per cent tax as almost all higher education institutions outsource their non-academic services such as catering, house-keeping, automation, construction, electrical, medical, stationary and other services.

These services were exempted from tax in the past which was withdrawn from April, 2017. “Universities outsource all its maintenance to private agencies. Now the universities have to pay 18 per cent tax.

This will finally affect the students,” said the officials. M Prasada Rao, professor of economics in Andhra University, told The Hans India that imposing 18 % service tax would add additional financial burden on students and finally affect higher education in the country.

“We are already lagging behind in students’ enrolment compared to the world education scenario. This move of the Union government will deny access of education to some sections of students which will have social impact in future. The expenditure of universities will grow without improvement in revenue and due to this, fee burden will be more on students. Especially, poor students will suffer a lot,” he said.

Interestingly, the Central government institution such as Central Public Works division is also collecting 18 % tax from universities for being a supervisory body on construction work in universities.

“It is a pity to pay 18 % tax to a Central government organisation just for supervising works. We are forced to pay higher service tax to contract agencies on construction works. This will increase expenditure of works and impose burden on universities,” said P Narasimha Rao, vice-chairman of APSCHE.

Prasada Rao said universities would see steep rise in expenditure as they have a number of departments, centres and institutions. The impact of higher service tax may be very high on students in private universities and educational institutions. A delegation comprising representatives of various universities met Union Finance Minister just before roll out of GST requesting exemption of service tax to higher educational institutions but the Centre is yet to consider their plea.

By K Varaprasada Rao