ASSOCHAM proposes government to ‘tax MBA coaching institutes heavily’

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MBAUniverse.com News Desk |
July 25, 2016
ASSOCHAM also mooted turning employment exchanges into coaching institutes in its note to the Finance Ministry

ASSOCHAM also mooted turning employment exchanges into coaching institutes in its note to the Finance Ministry
 
In a note submitted to the Revenue Department of the Finance Ministry on June 17, 2009 the Associated Chambers of Commerce and Industry of India (ASSOCHAM) proposed bringing different coaching institutes under the purview of tax for “minting money” from young students. The ASSOCHAM also mooted that the business of providing coaching, for entry into reputed institutes like IIMs, IITs, and AIIMs, apart from civil and armed services, should be taken over by the government.
 
The ASSOCHAM explaining its proposal said that the government has a huge asset-base of over 957 employment exchanges located across the country. It said, “Since employment exchanges have lost its relevance in new economies, majority of them should be converted into coaching institutes not only for civil and armed forces but also for IITs, IIMs and other vocational courses.”
 
The Chamber in its proposal, subjecting different coaching institutes to tax liability as part of its corporate social responsibility, held that “these institutes are minting money from young students” aspiring to get into IIMs, IITs, AIIMS and other reputed institutes. The note also pointed out that over a 100 coaching institutes preparing students for IITs and IIMs alone, roughly make about “Rs 10,000 crore annually”.
 
DS Rawat, ASSOCHAM Secretary General, said, “Time has come when tax authorities should wake up and subject coaching institutes not only to income tax but to other taxes such as service tax as well, since they earn a lot from young students.” He added that even after charging the students “fabulously”, these coaching institutes “shy away from making disclosures of their income” and go scot-free as far as their mandatory tax deposits are concerned.
 
Rawat said that the Chamber, therefore, seeks that such institutions be brought under the tax net and detailed monitoring of their income should be conducted since it is alleged that while enrolling students, the management “seldom gives documentary evidence for receipt of their fee”.
 
In its proposal, the ASSOCHAM also pointed out that the declining share of employment opportunities by employment exchanges is largely due to the increasing number of private and online job providers, which offer quick and hassle-free placement services. And therefore, it asked the ministry to convert some employment exchanges into civil and armed services, engineering, medical and MBA coaching institutes offering low fee without compromising on the quality of faculty and infrastructure.