Amid indications of cuts or exemption from the Goods and Services Tax (GST) at the coming meeting of the GST Council, the IIMs had approached the Human Resource Development (HRD) Ministry seeking exemption from service tax, especially for the one-year full-time management programs.
The 31st GST Council meeting, chaired by Finance and Corporate Affairs Minister Arun Jaitley, is scheduled to be held on December 22. The meeting is expected to focus on GST rate cuts to bring further rationalisation in the rate structure.
The Revenue Department, in a meeting with the HRD Ministry on November 18, is understood to have agreed to place a proposal before the GST Council to exempt all IIM programs from service tax, according to a report in the Indian Express.
The IIMs had collectively made a plea to the HRD Ministry to persuade the Finance Ministry to exempt their programs from GST on the sidelines of the Sixth PAN IIM World Management Conference that took place in IIM Bangalore from December 13-15.
While all core educational services are already exempt from GST as per Entry 66 of a notification dated June 28, 2017, Entry 67 categorically exempts the two-year full-time postgraduate program (PGP), fellow program and the five-year integrated program, the one-year programs were clubbed with the part-time executive programs that falls in the tax net.
The IIMs had put the ‘executive’ tag on the one-year full-time programs, aimed at professionals with work experience who want to move to the top management positions, to differentiate them from the 2-year full-time PGP programs for fresh graduates, with little or no work experience.
Internationally, full-time management programs for professionals with work experience are recognised as MBA (Master of Business Administration). The duration of the program could be one or two years. Programs that enrol fresh graduates fall in the category of MiM (Masters in Management).
The IIMs had collectively made a plea to the HRD Ministry to persuade the Finance Ministry to exempt their programs from GST on the sidelines of the Sixth PAN IIM World Management Conference that took place in IIM Bangalore from December 13-15.
The issue was discussed at a meeting between Higher Education Secretary R Subrahmanyam and Revenue Secretary Ajay Bhushan on November 18.
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Indian Expressed quoted an anonymous source to say that a proposal will be placed before the GST Council to delete Entry 67, which exempts only three types of programs. The IIMs, by virtue of being backed by the Indian Institutes of Management (IIM) Act, 2017, should be covered under Entry 66, which applies to all educational institutions.
Earlier, on July 9 this year, IIM-Ahmedabad had sought the intervention of the HRD Ministry after the revenue authorities demanded Rs 52 crore as service tax. Similarly, other IIMs had sought waiving of the tax for courses other than those exempt under Entry 67.
