The HRD Ministry has intervened on behalf of the Indian Institute of Management-Ahmedabad (IIM-A) in the matter of revenue authorities demanding the premier business school to pay Rs 52 crore as service tax.
Higher Education Secretary R Subrahmanyam is learnt to have written to Revenue Secretary Hasmukh Adhia this month urging him to consider IIM-A’s request to not be treated as a “commercial coaching and training centre”.
As first reported by The Indian Express on July 9, IIM-A had approached the HRD Ministry on January 31 drawing the latter’s attention to the Principal Commissioner of Central GST (Ahmedabad South) levying service tax on the fee charged by the institute for four postgraduate programmes.
Treating IIM-A as a “commercial coaching centre”, the Department of Revenue under the Finance Ministry had considered the two-year postgraduate programme (PGP), the postgraduate programme in food and agri-business management (PGP-FABM), the fellow programme in management — equivalent to a PhD — and the one-year postgraduate programme in management for executives (PGPX) as taxable since 2009-10.
Accordingly, the Revenue Department demanded Rs 52 crore as tax for the period 2009-10 to 2014-15 on the fee received for these courses. IIM-A, in its letter to the ministry, had said that it is an educational institute and has always been covered under categories that are exempted from paying service tax.
Although the institute has appealed against this decision to the Tribunal, IIM-A had HRD Ministry to represent the institute’s case with the Ministry of Finance to revoke the order passed by the revenue authorities. In his letter to Adhia, Subrahmanyam is learnt to have urged him to consider IIM-A’s request that its long-duration degree and diploma programmes should be treated as educational programmes and that the demand for service tax be revoked.