Unbelievable but true, the globally renowned top B-school of India, IIM Ahmedabad is treated as ‘Commercial Coaching Centre’ by the Revenue Department of Ministry of Finance, Government of India. The department has imposed and demanded an amount of Rs.52 crore towards service tax from IIM Ahmedabad on the course fee collected by it from 2009 to 2014 on various management programmes. IIM Ahmedabad has been pleading its case for long to revoke this order and restore its position as Higher Education Institute which is exempted from paying service tax.
Despite pleading the case without any result that it is an educational institution, IIM Ahmedabad has finally taken in the loop the Ministry of HRD to plead its case before Revenue Department.
Since IIM Ahmedabad has not charged any tax on its course fee and in case the Ministry of Finance does not include IIM Ahmedabad as a higher education institute, the students getting admission in 2019 may have to shell out Rs.2 to 3 lakhs more towards course fee which is already high enough at Rs.22 Lakhs.
Rs.52 Crores Tax Imposed 5 Years Course Fee
While there is no tax on the fee charged by education institutions, hefty taxation is imposed upon the commercial coaching and training centres and IIM Ahmedabad, according to Revenue Department is a commercial coaching centre.
The fee charged by IIM Ahmedabad on its various management programmes – the flagship 2 years full time residential Post Graduate Programme in Management (PGP); 2 Years Post Graduate Programme in Food and Agri-Business Management (PGP-FABM); One year Post Graduate Programme in Management for Executives (PGPX) and the Fellow Programme in Management (FPM) leading to Doctoral degree has been termed as taxable by the Revenue Department, Ministry of Finance, Government of India. Rs.52 crore tax imposed by the Revenue Department is for the period from 2009-10 to 2014-15.
MHRD Contacts MoF
Bewildered at the treatment by Revenue Department, treating IIM Ahmedabad which has a legacy of more than 50 years as a top management institute of India in imparting quality management education, merely as a commercial coaching centre, IIM Ahmedabad found it proper to use another Ministry of Government of India to get the things put into order. Accordingly, IIM Ahmedabad has asked the Ministry of HRD to intervene and plead its case before the Ministry of Finance.
Taking the matter in its hands, the MHRD Secretary for Commercial Higher Education, R Subrahmanyam has written a letter to Revenue Secretary Hasmukh Adhia in November 2018 to consider IIM Ahmedabad as a Higher Education Institute instead of ‘Commercial Coaching and Training Centre.”
It is an irony that Hasmukh Adhia, Revenue Secretary, MoF, himself is a gold medallist in one year post graduate programme in public management and policy from IIM Bangalore but so far the clear cut laid down norms in differentiating between a higher education institute of repute and the commercial coaching centre are still not visible in the Government’s system and procedures. No one is able to understand this mockery of defining the number one ranked management college of India as a coaching centre by the same Government that created this IIM Ahmedabad by means of an Act of Parliament.
IIM Ahmedabad boasts of a large alumni base that include former RBI Governor Dr Raghuram Rajan, top bureaucrats, corporate and industry leaders.
No GST on CAT Exam Fee: Course Fee Attracts Tax
The application fee for Common Admission Test (CAT) conducted by IIMs also does not attract any GST and is exempted from it. However, the course fee charged by this top B-school is covered in the tax net. There are 20 IIMs at present and IIM Ahmedabad has been singled out as commercial coaching centre by Ministry of Finance.
IIM Ahmedabad Fee: Steep Rise Expected due to Tax
Since 2009-10, the course fee of IIM Ahmedabad has gone up from Rs.6 Lakhs to Rs.22 Lakhs for 2018-20 batch. IIM Ahmedabad has also not collected any tax amount from its students on the course fee. In case the B-school has to pay the tax on its course fee, it is expected that the course fee for all the management programmes at IIM Ahmedabad may go up further by Rs.2-3 Lakhs which could be a major blow for the students who are already paying a very high fee to the institute.
Although IIM Ahmedabad has asked the Ministry that it is a higher education institute and is under the category of education institutes which are exempted from service tax, and MHRD has strongly recommended the case of IIMA before Ministry of Finance, it is yet to be seen whether the Revenue Department revokes its order terming IIM Ahmedabad as a ‘Commercial Coaching Centre’ and restoring its position as ‘Higher Education Institute’ exempted from paying the hefty service tax and saving the hundreds of IIM Ahmedabad students – studying at the B-school and planning to take admission in 2019 from paying through their nose.
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