GST on Higher Education Services: The downward curve of economic and social growth
Levying Goods and Service Ta (GST) on Higher Education Services has been a topic of debate ever since the new tax system was rolled out across the country. While many items are exempt from GST as of today, the logic behind choosing the components taxed suggests a sea of possibilities stalled. While books supplied are exempt from GST, higher education, skill development, and vocational courses are charged.
Again, Distance Education is taxable whereas the highest numbers of people pursuing distance education are from remote areas and cannot otherwise avail quality education. While Education Services and Educational Support Services are charged a GST rate of 18%, the dire need for improvements and enhancements in educational quality is ignored.
The impact of GST on Higher Education on economic and social growth
India’s demographics lean towards the younger generations, with over 50% of the population below the age of 25 and 65% of the population under 35 years of age. In short, more than half the country’s population will be responsible for our future – and their primary need is education. The GDP and the overall economy of the country depend upon the employment rate and the jobs available for this young generation.
The quality of education imparted in turn determines the individual’s standard of living and social growth. In these dynamic times, higher education is of utmost necessity and it is getting more expensive by the day. Levying GST on higher education has made quality higher education and skill development courses a privilege for the very few and has increased the skill-gap and, consequently, unemployment. The 18% GST rate levied on higher education effectively puts it in the luxury category whereas it is the foremost basic need.
Economic Growth: The economic growth of our country is largely driven by its human resources and the quality thereof. The advance of technology has brought into existence jobs that never existed earlier. To qualify for the jobs of tomorrow and stay relevant in the market, our populace will need more skill development courses, vocational courses, and quality higher education. With 18% GST levied on higher education services, it is impossible for people to avail these costly courses and keep pace with the times. Furthermore, India’s GDP has been slowing down in the past few years – from an accelerated growth of up to 8% in 2015-16 to 6.6% in 2017-18. Tax collection has also been the lowest in recent times, in part due to the rising unemployment.
Social growth: It is evident that education has been instrumental in raising the standard of living in our society. Educational services such as instruments, apparatus, models, etc. are charged at a whopping GST rate of 28%. The technical aids and vocational training which students need, e.g. Braille typewriters, Braille Watches, teaching and learning aids, etc. too are charged a GST of5%. To raise social conditions and shape a better country, it is necessary that these components too are exempt from GST.
What is the need of the hour?
Simply put, complete exemption from GST of all components of education is the need of the hour. When developed countries such as Germany, Sweden, etc. are offering free education to all their nationals, it is high time India too made best-in-class education available for all, at the lowest possible cost. More coaching classes, training programs, and exemption from GST have to be the first steps towards bettering educational conditions in the country.
What can you do about it?
Many people are submitting petitions and working towards bringing a change and seizing their basic right to a better education. We need to make sure we get our voices and opinions heard through these petitions. Many are still under the impression that all important aspects of education are exempt from GST which is not the case. For example, many are not aware that they might not be paying GST for books supplied but are paying extra for basic educational supporting services such as uniforms, laboratory equipment, etc. without which one cannot complete their education optimally. Spreading awareness of how much one pays for education and how much one should be paying; one’s basic rights on education, etc. is also a huge contribution.
To start with, you can sign this petition to voice your opinion: https://www.change.org/p/gst-council-abolish-the-18-gst-on-higher-education