Andhra Pradesh - Eluru   

Minister clarifies on service tax

Staff Reporter

ELURU: S.S. Palani Manickam, Union Minister of State for Finance, has clarified that primary schools in private sector do not fall in the scope of service tax. He made this clarification while responding to a plea made by MP Kavuri Sambhasiva Rao. Mr Rao wrote to P. Chidambaram, Union Finance Minister, underlining the need for exempting small and medium schools engaged in imparting primary education, from the levy of service tax.

The MP said the authorities of the Central Excise department had wrongly depicted the schools as ‘commercial training or coaching centres’, proposing the levy of service tax on such institutions. Mr. Rao apprehended that the levy of service tax on these educational institutions would have an adverse bearing on the Centre’s drive for universalisation of elementary education as the tax was passed on to the students in the form of an increase in the fee.

Mr. Palani Manickam clarified, “At present, service tax is levied on services provided by commercial training or coaching centres imparting skill, or knowledge or lessons on any subject. However, primary and secondary education services provided as part of school education by regular schools, whether or not recognised or approved, do not fall in the scope of the said taxable service”.

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