VAT on private education

Nelson Mandela once said, "Education is the most powerful weapon we can use to change the world'. Our government also recognises the value of education and is providing different types of incentives e.g. stipend, free books and study materials for the school-going children. But for higher education, the scope is too limited in our country. Approximately 38,000 seats are available in the public universities. A large number of students need to enrol in the private universities, medical and engineering colleges. Usually the cost of education in private universities are much higher than that of public universities. But in the recent budget Value Added Tax (VAT) has been imposed on education in private universities. Students of private universities have been agitating against the imposition of  VAT since Wednesday last.

 VAT is for value addition.  Education should be out of VAT. Private education is costly and imposition of VAT will further increase the cost of private education. Once education at private universities was only for the students from rich families. But now many students from lower middle, even poor families, take admission in the private universities, engineering college or medical colleges. As per private university act, education is being considered as non-profit business. If the University Grant Commission (UGC) or the government feels that private education is profitable business and business people are taking this advantages then it should be declared as such and VAT or taxes may be imposed on such educational institutes as is done in the case of other business enterprises. They can see the financials of private educational institutions to oversee their financial activities. Moreover, some guardians claim that the cost of private education is unbearable for them. The government or UGC should take care of it by rationalising the fees.

Anwar Faruq Talukder

Banker