Services to Schools exempted - What about services BY schools?
THE fact is in most cases these services are provided by the schools' often charging a separate fee for them. Board has clarified a doubt which did not exist and conveniently ignored the persistent doubt.
By the way, the Board should understand that these “rumours” and “mischievous suggestions” may have also been floated by the field formations and the apparition of a notice in some nook or corner is what causes these educational institutions and organizations to become apprehensive. So, not giving any credence to these “rumours and mischievous suggestions” does not always work - it's merely wishful thinking!
Further the definition of "auxiliary educational services" has specifically mentioned catering for the students under any mid-day meals scheme sponsored by Government - Now the Board clarification includes canteen. Does it mean the Board clarification expands the definition?
It is the mischievous amendment made in 2013, which has created an anomaly whereby auxiliary services provided BY the educational institutions became taxable when the same services if outsourced continue to be exempted. In their eagerness to capture revenue from renting of immovable property BY the educational institutions, they also removed exemption for auxiliary services BY these institutions. Board should read their own law and the effects of amendments and their own clarification (Para B(4)(i) of JSTRU letter dated 28.02.2013) before blaming others.
In many States, there is an upper limit on fees as prescribed by the State Governments, but the fact is the schools collect fees far more than the prescribed limits and often show the excess amounts as some additional fee. Now is this additional fee taxable?
Even the Central Government's own ‘Kendriya Vidyalayas' collect a computer fee of Rs. 100 and a Vidyalaya Vikas Nidhi of Rs. 500/-. Are these amounts taxable?
Education is a National Priority - should we tinker it with confusing taxes; If the managements are making huge profits, you can always levy Income Tax on them. Can't they and more importantly the helpless parents be spared the service of Service Tax?