While most experts feel that the rollout of the Goods and Services Tax (GST) will not have any immediate impact on the education sector and keep the household budget for academic costs untouched, educationists beg to differ. They believe that the effects of GST will be felt in more ways than one.
Fees for tutorials, competitive exam coaching
While school and college fees are exempt from taxes, parents are concerned about the notice given by coaching classes on the rise in fees to accommodate the new tax regime. For Wanowrie resident Shazia Patel, whose twin children are preparing for Std XII board exams, it means a substantial rise in fees. “I am already paying Rs 4,000 per month for each child’s monthly tuition fee. Their engineering coaching classes will cost me at least Rs 1.5 lakh. I will have to pay an additional 3 per cent on all these fees. This is in addition to all the other costs that will increase,” she lamented.
Durgesh Mangeshkar, director of IIT Prakashan, agreed that the increasing costs of tutorials will impact parents significantly. “While taking into account the exemptions for educational fees, the government does not consider coaching classes. They may be considered a luxury but they are, in fact, a necessity, especially for students preparing for competitive exams. Unfortunately, the fees of such classes are high.. sometimes they are over Rs one lakh, much higher than school or college fees. We are going to start passing on the additional 3 per cent tax burden to parents from next month, so yes, it will affect them,” he said.
Lalit Kumar, MD, Prime Academy also said that the rise in taxes — from 15 per cent service tax to 18 per cent GST — will have to be borne by parents. In some rare cases, the institute may bear the cost, he said.
Fees for certificate programmes, professional courses
The GST council has kept traditional courses and those approved by government-recognised bodies out of the tax net. But the tax component on non-conventional and certificate courses will go up, said Bharat Agarwal, managing trustee, Vishwakarma Institute of Technology.
“We do offer some courses that are not affiliated to the technical education directorate of the state. These may be professional or skill-based courses or some certificate programmes, like a foreign language course. Once GST comes into effect, there is going to be an additional 4 per cent increase in fees, because of the increasing tax,” he said. However, Agarwal said the long-term impact of GST was more important than the immediate effect.
“This year, you may not see any immediate impact on fees, but from next year, there will be some revision. That’s because while college fees may be tax-free, the cost to an educational institution is likely to increase. For example, many institutes are operating from rental premises and rents are not low when taxes are applicable. Besides that, stationery, transport, housekeeping staff, security services and much more are needed to run a college and if all these costs increase, then in the long run, a fee revision is likely, though colleges will try to absorb the costs,” he said.
Living costs for students
In a city like Pune, which has a large number of students who come from across India to pursue higher education, educationists say that the impact of GST on them will be inevitable.
“Our college fees may not increase but these students need transport, mess and canteens, hostels and many other services, where the impact of GST can be seen. Hence, their living costs are likely to get affected,” said Swati Mujumdar, director, Symbiosis Centre for Distance Learning.
“Food-related expenses, especially dining out, will cost me much more now. We hostelites usually prefer dining out, or eating in canteens and dining halls, so we will be affected by GST. Even watching movies at multiplexes will become more expensive,” said Bijit Somani, a final year student of chartered accountancy.