Private schools in the city are up in arms over the Central Government’s recent move to impose service tax on all additional services such as karate and swimming. Such a move would only result in education becoming costlier, schools contend.
Commissioner of Central Excise has issued a circular to private schools asking them to register all auxiliary educational services and pay service tax on the fee collected for these services. As such, schools will have to pay service tax for food, transportation, extra-curricular activities, excursions and field trips.
All activities apart from the core one of education would now be taxed. This would force schools to either increase the fees or stop offering additional services such as computer classes, R. Visalakshi, president of Tamil Nadu Private Schools Association told The Hindu here on Sunday.
Schools may even stop running buses, which would only cause more problems for students and parents. Even special classes were likely to be taxed.
This move was something of a paradox as the same Government that had made education free through Right To Education Act was imposing an additional tax on educational institutions.
Schools in Tamil Nadu also do not have the option of revising the fee as the School Fee Determination Committee, headed by retired High Court Judge S.R. Singaravelu, had fixed recently the fee structure for the next three years.
“This move also results in multiple headaches for schools. Apart from its financial implications, schools will now have administrative problems also,” added Ms. Visalakshi.
Tamil Nadu Nursery, Primary, Matriculation and Higher Secondary Schools Welfare Association General secretary G. Krishnaraj said that this would have a major negative impact on private schools, which were already reeling from the “low fee levels.” The association was planning a protest on August 12.
Private school associations in the country were planning to meet shortly in Bangalore to deliberate the implication of this move, he added.