New Delhi: Minister of State for Finance Shiv Pratap Shukla on Tuesday said the government is open to reconsider the Goods and Services Tax (GST) rates on certain components in the education sector.
Speaking at a pre-budget discussion on expectations for education, entrepreneurship and employability, the Minister said tax on certain components in the education sector can be reviewed based on strong reasoning.
"Though there is demand for tax cuts from all sectors and large revenue is needed to run the country, you can come up with your recommendations for reviewing GST on certain components in the education sector," he said at a roundtable jointly organised by consulting group StratFirst and industry body Assocham.
"If there is strong reason to review the tax rate on certain components, I assure you we will take it up with Finance Minister Arun Jaitley," Shukla said.
StratFirst, which is an interactive interface for public and private players in the knowledge sector, has provided first of its kind platform for pre-budget discussion in the education sector. It also came out with a joint report with the Assocham.
The report, which advocates lowering the cost for both students and educational institutions, said all ancillary services to higher educational institutions have been made taxable under the GST increasing the cost of education by about seven per cent.
Services like transportation and admissions are generally outsourced so that institutions can focus on providing quality education.
"It is proposed to partially exempt GST on outsourced services in higher education from 18 per cent to 5 per cent, to create low-cost educational institutions that offer services at all levels -- primary, secondary and higher education," the report said.
The report also suggested a scheme on the lines of Ayushmaan Bharat for the education sector as well to provide the benefit of education to the masses of the country. The bright students must be rewarded under such schemes, it said.
"I congratulate StratFirst India and Assocham on organising an excellent discussion on Budget Expectations for the 3E's -- Education, Entrepreneurship and Employability. Fostering conversations in these key sectors, involving all stakeholders is the only way forward in resolving vital issues which will help India claim its rightful place in the new world order," JNU and Melbourne University professor and Padma Shri Amitabh Mattoo said.
Further, the participants recommended tax sops to attract quality employment in education.
"It was noted during the conference that India lacks more than two million teachers. To motivate people to join teaching as a profession, it is proposed that teachers, professors and researchers be eligible for a special tax regime," a release said.
Taxable income for employees of educational institutions can be calculated after giving a standard deduction or raising a threshold exemption limit for them, it said.
"We are very glad to see the level of interest and more specifically the convergence of thought between the government and private sector in helping to boost education, entrepreneurship and employability in India. We are looking forward to presenting the report from today's discussion to Finance Minister Arun Jaitley," StratFirst India Brand Consultant Nancy Jain said.