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Told to Cough up Rs 52 Cr as Service Tax, IIM-Ahmedabad Seeks HRD Ministry’s Intervention

The revenue department charged Rs 52 crore as service tax on fees collected from the period of 2009-10 to 2014-15.

Meghdoot Sharon | CNN-News18

Updated:July 9, 2018, 4:43 PM IST
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Told to Cough up Rs 52 Cr as Service Tax, IIM-Ahmedabad Seeks HRD Ministry’s Intervention
File image of IIM Ahmedabad building. (Photo: iimahd.ernet.in)
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Ahmedabad: Indian Institute of Management, Ahmedabad (IIM-A) has sought the intervention of the Union Human Resources Department Ministry, seeking quashing of an order of the Revenue department, demanding payment of Rs 52 crore in the form of Service Tax for courses being run by it. Meanwhile, the IIM-A has also appealed against the order in the Tribunal.

Treating India’s premier management school as a commercial coaching centre, the Principal Commissioner of GST (Ahmedabad) had earlier issued a notice to IIM-A, to pay up a sum of Rs 52 crore as GST. This is for four programmes that the IIM-A conducts namely – The regular Post Graduation Programme, PGP (Agri Business and Management), Fellow Programme in Managerment and The PGP-X (Executive).

The revenue department charged Rs 52 crore as service tax on fees collected from the period of 2009-10 to 2014-15.

IIM-A Director, Professor Errol D’Souza, in a statement said, “We have made a request to the HRD Ministry on the matter and the matter is being pursued. IIM-A has appealed to the Tribunal on February 13, 2018.”

Sources in the IIM-A said that it is mandatory to pay up 7.5 per cent of the total demanded amount in case an appeal has to be made before the Tribunal. In accordance, IIM-A paid up a sum of Rs 4.01 crore as deposit fee while making the appeal in the Tribunal.

Meanwhile, it has written to the HRD Ministry, asking it to take up the matter with the Finance Ministry, stating that IIM-A is an educational institute and is covered under the category of institutions which are exempt from paying service tax.

In its letter to the HRD Ministry, IIM-A has cited a March 2016 notification by the Finance Ministry which states that the two-year full time Post Graduate Programme, Fellow Programme in Management and five-year integrated programme in management being offered by all IIMs will be exempt from service tax.

With the IIM Act being implemented from January 2018, it is learnt that other IIMs too have approached the HRD Ministry over Service Tax being charged by the Revenue Department for courses they have been offering.
| Edited by: Huma Tabassum
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