The Finance Ministry’s notification to levy GST on flagship Post-Graduate programmes has created a few sleepless nights for one of India’s premier institute known for churning out highly paid management post-graduates from its campus each year. IIM Ahmedabad has been recently issued a 52-crore GST notice on account of tuition fees charged by the Institute on the Post-Graduate programmes offered between 2009 and 2015. As per the notification, the following programmes are taxable effective FY10:
- Postgraduate Programme
- PGP in food and Agri-Business Management
- Fellowship Programme in Management.
- One-Year PG programme in management For Executives.
The notice to IIM-A was issued from the office of the Principal Commissioner of the Central GST (Ahmedabad south). As GST was not introduced until mid last year, the Rs. 52 crore tax amount is levied as service tax. Considering the finance strain such an amount would have, the IIMA has requested the Union HRD ministry to consult with officials in the finance ministry and seek a solution.
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IIM-A Director Errol D’Souza said,”We have made a request to the Union HRD ministry on the matter and it is being pursued”. Reportedly, Mr Errol D’Souza also stated that Rs. 52-crore service tax would burden IIM-A’s resources.
As per recent development, the HRD Ministry has taken up the request with the finance ministry. There is also a fair amount of confusion with some officials referring to a finance ministry notification that said that GST would not be levied on PGPs and fellowship programmes in management. This ambiguity has been brought before the Ministry. A request has also been made to the HRD Minister for the same. An official said, “The HRD ministry is following up with the finance ministry. We have asked HRD minister to intervene to help remove GST in all so that there should be no bias between the two programme”.
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