Tax on education is regressive – Kerala High Court
Today we are carrying a judgement of the Kerala High Court striking down Service Tax on parallel colleges. The judgement considered in detail certain social and constitutional issues. Here are a few quotable quotes:-
even if the State is not able to finance higher education as required under the Directive Principles of State Policy under article 41 of the Constitution, it should not deny and discourage opportunities for education by adding cost to it in the form of tax on education which will certainly disable the economically weaker sections from pursuing higher studies
If education is run on business lines, then solution is to amend section 11 and other relevant provisions of the IT Act withdrawing the exemptions to institutions and Government can simultaneously provide financial aid to beneficiaries which will put an end to misuse of income-tax provisions.
levy of service-tax on students will serve the purpose of disciplining those who make business out of education.
Tax on education, particularly when the incidence of tax is passed on to the beneficiaries, that is, the students, is a regressive legislation and has to be condemned, more so, when large number of poor people seek salvation through education and employment
levy of service-tax for services rendered by parallel colleges which indirectly falls on the students, but by simultaneously providing exemption to regular affiliated colleges allowing the students therein study free of tax is patently discriminatory and violative of article 14 of the Constitution of India
Click here to see our analysis + Judgement.