Industry body Assocham has sought enhanced outlay for education in the upcoming Budget and pitched for exempting higher education from the Goods and Services Tax.

In a letter to Finance Minister Arun Jaitley, the chamber argued that with external state regulation and risk of agitation in the campus, higher educational institutions can neither absorb the new tax burden nor pass on the same via increase in fees.

“The Union Budget 2018 would be the first after imposition of GST... A time has come for correcting the distortions which were earlier brought in by repeated amendments in the Service Tax for education sector. “The last amendment brought in March 2017, denying tax relief for listed services for higher educational institutions, needs to be immediately withdrawn and end the untenable discrimination against higher education institutions,” the chamber said in the letter.

Besides, tax exemption on construction, maintenance and repair of buildings of educational institutions be granted, it said. The chamber also sought increased Budget allocation for education sector.

It observed that the Kothari Commission and the recent Subramanian Committee (set up after the 2016 National Policy of Education), the expert recommendation and national view had been for a minimum public outlay of 6 per cent of GDP for education sector.

The actual public expenditure over the years (even after the additional revenue garnered through levies of Education Cess Surcharges) for education had however been only around 4 per cent, it said. “There is a crying need, more so now for higher public expenditure on education at all levels — from schools to universities, advanced research institutions,” Assocham suggested.

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