NEW DELHI, SEPTEMBER 20: Executive programmes offered by the Indian Institutes of Management (IIM) will come under the banner of the Goods and Services Tax (GST). As per the directives of the Authority for Advance Rulings, Madhya Pradesh, the one-year programme offered by the IIMs is taxable despite the institutes getting tax exemptions for its programmes.
Programmes covered by IIMs are exempted from tax under the Indian Institutes of Management Act, 2017. The Authority for Advance Rulings order came in response to an answer sought by IIM Indore. The body said that even though IIMs are exempted from tax for its courses, executive programmes are not specifically exempted from the GST system. GST allows services covered under educational institutes to be tax free.
Points of contention
IIM Indore main concern was whether or not its Executive Post Graduate Programme in Management (EPGP) is taxable under GST. However, the institute also asked the Authority for Advance Rulings to inform whether the fee collected for the executive programme in 2018-19 was taxable under GST. The institute also wanted to know whether the GST is applicable for the fees collected before the enactment of the Indian Institutes of Management Act, 2017 or after it.
The concerns cropped after the Authority for Advance Rulings released two notifications, one in November and the other in December 2017. While one prescribed that a GST of 18 per cent has to be paid by educational institutes, the other offers exemptions to some categories. As per the notification, the regular two-year post graduate programme, Fellow Programmes and the Five-year integrated programmes are not taxable. The contention of the Rulings body is that only those programmes that were listed on its notification would be tax free. Apart from the programmes, services provided to students and faculty including conducting exam and security are tax free.
“Specific exclusion of Executive Development Programme from exemption has been made loud and clear, leaving no scope for any interpretation or reading between the lines,” the authority stated.
About IIMs
The Indian Institutes of Management are autonomous institutes offering management to students across various professional categories. At present there are 20 IIMs in India which offer multiple full time MBA programmes along with many doctoral and executive MBA courses. IIM Ahmedabad, IIM Bangalore and IIM Calcutta are listed among the top business schools in the world. Admission to the two-year postgraduate programme in IIMs is done through the Common Admission Test (CAT).