Maharashtra Class Owners' Association write to state finance minister to reduce GST by 10%

Nov 13, 2017, 10:40 IST | Pallavi Smart

They claim that it is not only burdening parents, students are dropping subjects or taking classes for a shorter duration to save money, and this is affecting business

Calling themselves another casualty of the new Goods and Services Tax (GST), private coaching institutes are now demanding that their service tax be reduced to 8 per cent from current 18 per cent. The Maharashtra Class Owners' Association has written a letter to the state finance minister to consider their request. Coaching class managements have complained that not only is it burdening parents, many students are dropping subjects or taking classes for a shorter duration to reduce expenditure, which is affecting business.

Coaching class owners have written to the finance minister about their request. Representation picCoaching class owners have written to the finance minister about their request. Representation pic

'Many classes intensively coach students for competitive and professional examinations. In the past, coaching classes were charged 5 per cent service tax which then increased to 8 per cent, 10 per cent, 12 per cent and then 12.36 per cent. Now from first July of 2017, the government has levied 18 per cent on training and coaching classes which paralyses the institutions,' says the letter sent to finance minister Sudhir Mungantiwar. The letter further points out several reasons to justify their demand, such as — it is a financial burden on parents, education is an expenditure sector for the government, classes generate employment, and that it is a myth that coaching institutes are a money-making business.

President of the Association, Sachin Karnavat said, "It is generally perceived that coaching institutes are a money-making businesses. Actual data shows that return on investment in coaching classes is 5.7 per cent. Fees charged by coaching institutes are in many cases less, compared to fees of private and unaided schools and colleges. If we do not voice our concerns now then soon this tax figure may rise."

Karnavat also said several classes managements have started complaining how GST is affecting them. Students are cutting down on subjects or joining classes only for important years. "For example, students are making requests to join only for Std XII," explained Karnavat who said that the classses are not refusing to pay tax, "But it should be in a proportion that is affordable for all."

Narendra Bambwani, owner of Reliable Commerce classes said, "For the commerce stream minimum fee structure is R20,000 per year. A parent ends up paying around Rs 4,000 just for tax. If a student takes a combination of CA or another competitive examination with pure commerce, the fee structure increases further. This can certainly deter anyone from paying the additional amount."

8%
The coaching class owners want GST to be reduced to this


 

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