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GST ISSUES ON COACHING INSTITUTIONS

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 5-2-2016 - While 'education' continues to be of utmost importance for the country's economic growth, it also has been a priority for the government in extending tax benefits and other concessions to boost education (both primary and professional / technical) in the country. The much thoughtful leaders of India have spared the education sector all alone from levy of taxes considering the importance of the same for the c .....

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mpulsion of the Government to raise resources has spared none and in the current times , when education has opened up flood gates to bountiful riches and capturing seats of power , both at school as well as professional level . At this juncture, it must be mentioned that it is not teaching but coaching which has ensured rags to riches for many who in the guise of service have plundered the student community to accumulate riches far beyond they could have earned from their regular activity. It is .....

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aced in such a situation where its inflow and outflow both are under the negative list or exempt and it is only the coaching part of entire education which is subject to levy of Service Tax. It may be necessary at this point. To bring in the relevance of coaching in our education system. Why do we need coaching today ? What is the purpose it serves ? What if coaching is not available ? In fact coaching bridges the gap of quality between the input (student coming for coaching) and the output (qua .....

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er: L. Services by way of- (i) pre-school education and education up to higher secondary school or equivalent; (ii) education as a part of a curriculum for obtaining a qualification recognized by any law for the time being in force; (iii) education as a part of an approved vocational education course; Such educational services are exempt from the levy of Service Tax and are in Negative List which are related to delivery of education as a part of the curriculum that has been prescribed for obtain .....

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oaching only supplements the education and is an aid to complete the educations. Coaching and education both go together and in the present system, one cannot think of education without coaching. Infact many schools and colleges also provide coaching to the students appreciating the fact that it cannot be done away with. All parents want to provide the best educational opportunities for their children and coaching has become indispensable and irreplaceable to reinforce learning. More parents are .....

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o assimilate and grasp all the lessons taught in schools and clear the entrance exams of various professional degrees and achieve better results without attending coachings. Moreover, these are the best option for moderate and weaker students to get the much needed coaching and teaching to understand and grasp the knowledge in a much easier way. Even if a student is performing well , it is likely that some coachings will give him/her an edge over their peers. As such, treating coaching and educa .....

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te …. Today coaching is a major feeding industry to the main stream education sector and given this fact, it is more than justified that it be considered at par with education and spared from all types of taxation by way of exemptions, concessions and inclusion in negative list for the purpose of Service Tax. This argument becomes important at this juncture when India is embarking into an era of largest ever indirect tax reforms in the country with the introduction of Goods and Service Ta .....

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to improve quality of education so much so that coaching and education are intervened and no separate coaching is required. Most of the goods and services which are consumed by coaching providers are not considered ad inputs or input services and as such are not eligible for input tax credit which is an example of distortion in the tax system itself. For example, no credit is allowed of construction and works contract as in the definition of input services as defined in 2(l) of CENVAT Credit Ru .....

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al goods, except for the provision of one or more of the specified services; or (B) services provided by way of renting of a motor vehicle, in so far as they relate to a motor vehicle which is not a capital goods In absence of significant amount of tax credit not being allowed, it adds to the cost of providing coaching (educations) which again is not desirable. Coaching section also suffers from high completion leading to increased costs in terms of advertisements, fee concessions and discount e .....

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