Tag Archives: Taxation in India

Tax on auxiliary services to make education dearer

Friend sent me this link about how schools are about to get costlier, commenting that it would mean more homeschoolers and that I should be happy.

When education was categorised under the negative list in the 2012 Budget, a finance ministry notification issued on June 20, 2012, read: “Services provided to or by an educational institution in respect of education exempted from service tax, by way of (a) auxiliary educational services or (b) renting of immoveable property” are exempted from service tax. However, another notification issued on Budget Day replaces “services provided to or by” with “services provided to”.

While some academics who believe that the change in wording is an error have been trying to get it clarified by the finance ministry, the excise department has gone ahead and asked schools to pay up. “The intent to levy service tax on services rendered by educational institutions to outsiders is right. But, the finance ministry notification seems to indicate the contrary. I appeal to the FM to exempt auxiliary services and renting of hostels provided by educational institutions to its own students from service tax,” said S Vaidhyasubramaniam, dean of planning and development, Sastra University.

Click here to view original web page at timesofindia.indiatimes.com

This development is rather alarming because good schools are already rare and prohibitively expensive for a majority of the population.

I am not happy, actually. The idea that people might move to homeschooling because they cannot afford school strikes to me as a failed education policy and the worst possible reason to switch, though it is true homeschooling can be cheaper (or far more expensive) than school.

Homeschooling, in such a case would not be the first choice, but a compromise made out of necessity. This may not be a suitable situation for the considerable commitment to pursuit of learning that homeschooling demands.

Not to mention that the legal position of homeschooling itself is very tricky in India. While no one is persecuting homeschoolers, the few efforts that were made for recognition failed completely with no consession whatsoever so far. Informally, the word is that parents dissatisfied with the system may choose to homeschool, but it can be too precarious to risk for people unfamiliar with the concept.

In short, education in India is slowly becoming a complicated and increasingly meaningless thing, with no real alternatives.

 

Note: There are plenty of homeschoolers in India who have decided that we will not be sending our children to school. Technically, we are on the wrong side of the law, but many of us are determined enough to risk consequences if need be, but not inflict the schooling system on our beloved children.

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