The Goods and Service Tax was launched on Friday in the Central Hall of the parliament. Since the dawn of the independence, this is the biggest tax reform in the country which has completely changed the indirect tax landscape. While it will affect the various areas of life of common man, let's see what the new tax regime has in store for the students' community?
Consider a typical case of a graduate student who now wishes to pursue his/her post-graduation. For many such students, higher education will become expensive as service tax will rise from 15 percent to 18 percent. This rise in the tax will burden extracurricular activities, books and everything else.
Under the umbrella of GST, education in schools and pre-schools is still tax free but education services provided by colleges and universities will cost 18 percent of extra service tax. Not only this but the similar impact will be on the students going for the coaching classes and other non-conventional courses as they will charge a hike of 3 percent in the fee under the GST.
"Education is a bare necessity today and students are now left with no choice but to pay more to get quality education. Other concern is that there are many students who don't come from financially strong backgrounds; increased taxes may affect them badly. My own perception certainly is that education sector as a blanket should have been either left free of GST or not charged more than a 3, 4 or 5 per cent tax," said Naveen Chopra, Chairman, Education counseling firm The Chopra's.
However not everyone is in the same boat when it comes to GST. "I don't think a rise of 3 per cent in college fee or tax will make that big a difference to students or colleges alike. In the long term, I think colleges can pass on the benefit to students in the form of no fee hikes, which were otherwise around 7-8 per cent yearly, due to inflation," said Mrs Shrimali, Acting Director, MDI Gurgaon.
Students who are already enrolled and those who are planning to enroll in the institutes in Kota, earlier appealed to Modi to exempt GST on coaching classes.