No-grant IIMs bristle at GST, government softens stance on exemption

The IIMs have objected to the GST being levied on their earnings from short-duration programmes, arguing the tax is a double whammy since they no longer receive government grants.

Following the objections, the education ministry is learnt to have proposed to fully exempt the 22 IIMs from the GST. The proposal needs finance ministry approval.

Currently, the IIMs are charged GST on short-duration courses of less than a year, such as executive education programmes. Courses like the MBA, PhD and Executive MBA are exempt from the GST.

A government order had in 2019 underscored that the IIMs award certificates rather than degrees for their short-term training courses. The executives are considered participants rather than students, and the certificates are not deemed an educational qualification under the law.

Therefore, such short-term training courses are notexempt from the GST, the order said.

Institutions such as the central universities and the IITs do not offer such short-term courses, and are not required to pay GST.

At a recent meeting with the education ministry, the IIM directors underlined that the B-schools manage their expenses from their owninternal earnings, mainly tuition fees.

Two IIM directors told The Telegraph that the central universities and theIITs receive substantial government funding for expenses such as salaries and pensions. The IIMs foot salary andother bills from their own earnings.

“It was argued that the IIMs generate the revenue they need for their functioning,” one of the directors said.

“When other institutions, which depend substantially on government funding, are not being charged GST, the tax levied (on the) IIMs is a double whammy.”

The other IIM director stressed that the National Education Policy promotes multi-disciplinary education, and that the IIMs’ executive programmes qualify under that category since they combine various subjects.

An education ministry official said a proposal to exempt the IIMs from theGST had been mooted within the ministry.

“The final decision will be taken by the finance ministry,” the official said.

Source : https://www.telegraphindia.com/india/no-grant-iims-bristle-at-gst-government-softens-stance-on-exemption-prnt/cid/2134752