Exempt educational products from central and state taxes: Assocham

Apex industry body Assocham has sought exemption to all educational products meant for use by school and college students from both central as well as state taxes to promote education and to make available educational aids at an affordable price, particularly to those in the lower economic strata.

At present, educational products like exercise books, pens, note-books, pencils, geometry boxes and others are subject to two per cent excise duty (without CENVAT credit) plus education cess. Additionally, most of these products are also subjected to state value added tax (VAT) at the rate of five per cent.

Assocham has further suggested that products required for educational purposes (eg, notebooks, pencils and the like) should also be exempt from GST (goods and services tax) as such the exemption list should be determined in accordance with the nature of goods and services.

''Exemption available in respect of all services received by an educational institution should be restored to make education services more affordable,'' Assocham further suggested in its pre-budget memorandum 2015-16 (indirect taxes) which has been submitted to the government.

Assocham has suggested that renting of immovable property service provided to educational institutions should continue to be exempted and scope of exempted services be enhanced by covering service of guest teachers/faculty, computer software, information technology (IT) lab services or rather all services directly relating to the delivery of education or training to students.

''Withdrawal of exemption on services such as renting of building/premise, staffing/recruitment and others, would lead to increase in cost of provision of education services,'' said DS Rawat, secretary general of Assocham.

With a view to improve the overall education scenario throughout India, Assocham has suggested increasing budget allocations for education sector, easing education loan availability, floating innovative and concrete policies to attract foreign investors to improve education infrastructure, facilitating foreign universities' participation in India's education sector, offering incentives like scholarships and other schemes to enhance female enrolment across states.

Education is one of the key priority areas of the government and Sarva Shiksha Abhiyan is a flagship programme for achievement of universalisation of elementary education.

In the last union budget the central government has allocated Rs28,635 crore for Sarva Shiksha Abhiyan and an additional Rs4,966 crore towards Rashtriya Madhyamik Shiksha Abhiyan.