MHRD seeks service tax exemption for IIM-A

The Ministry of Human Resource and Development (MHRD) has written to the revenue authorities demanding an exemption of  Rs 52 crore of service which is expected to be paid by IIM Ahmedabad.

Earlier, in January this year,  IIM-A had approached the HRD Ministry seeking to be exempted  from the service tax levied by the Principal Commissioner of Central GST (Ahmedabad South) on the fee charged by the institute for four postgraduate programmes.

The Higher Education Secretary R Subrahmanyam is said to have written to Revenue Secretary Hasmukh Adhia this month asking  him to consider IIM-A’s request to not be treated as a “commercial coaching and training centre”.

The Department of Revenue under the Finance Ministry had put “the two-year postgraduate programme (PGP), the postgraduate programme in food and agri-business management (PGP-FABM), the fellow programme in management — equivalent to a PhD — and the one-year postgraduate programme in management for executives (PGPX)” as taxable since 2009-10.

Hence, the Revenue Department demanded Rs 52 crore as tax for the period 2009-10 to 2014-15 on the fee received for these courses. However, IIM-A has written a letter to the ministry emphasizing that it is an educational institute and has always been covered under categories that are exempted from paying service tax.

Although the institute has written to the revenue department, IIM-A has now approached HRD Ministry to represent the institute’s case with the Ministry of Finance to revoke the order passed by the revenue authorities.

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