Centre’s decision to impose 12.36 p.c. service tax on school transportation stumps parents
Going to school is costlier now, more so, if your child is taking the school bus and eating in the school canteen.
Parents are up in arms against the 12.36 per cent service tax imposed by the Central government on school transportation. Several parents are getting notices from the school managements to pay 12.36 per cent service tax on the transportation fee citing that they got notices from the Excise, Customs and Service Tax Department.
The department has asked schools to immediately obtain service tax registration and discharge service tax liability failing which penal action will be initiated according to the Finance Act, 1994. School managements have decided to pass the burden on to parents and have sent letters to them to pay the tax along with arrears immediately.
“It is ridiculous and shocking. They have not even spared food consumed in canteens,” fumes P. Anala, mother of a child studying in ‘Slate School’.
Among the 2,500 private schools in the city and surrounding areas about 500 schools offer bus services. On an average parents spend Rs. 1,000 on each child for transportation and they will have to shell out an additional Rs. 124 per child every month.
An estimated five to eight lakh children use school buses in the city. The number would be nearly 25 to 30 lakh students in the 28,000 private schools across the State.
“The RTE Act mandates the government to provide school education. Levying service tax is nothing but deviating from its responsibilities,” feels S. Sreenivas Reddy, president of Private School Managements Association. “Thousand of crores of rupees are collected through education cess on service tax and taxpayers do not know where the money goes.”
Nearly 6,000 buses ply on city and Ranga Reddy district roads transporting school and college students of which 3,500 are exclusively for schools. However, college managements seem to have found a way out to escape the service tax dragnet by not showing the transport fee separately.
A college correspondent says service tax will be applicable only if money is taken for transport service separately. Hence, most colleges use the exemption to their advantage.
Keywords: Central government, service tax, Excise, Customs and Service Tax Department, Ranga Reddy district, Finance Act, 1994, RTE Act, Private School Managements Association in Hyderabad, Ranga Reddy district, Colleges in Hyderabad