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From Lunar Triumph To Enlightened Minds: A Call To Revise GST On Education & Training Services For Scientific Advancement – IMPRI Impact And Policy Research Institute

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From Lunar Triumph to Enlightened Minds A Call to Revise GST on Education & Training Services for Scientific Advancement

In the global quest for excellence, India’s strides in scientific and technological advancements have drawn international attention. As the nation strives to ascend to new heights, fostering scientific temper and knowledge acumen becomes paramount. A significant leap towards this goal lies in the rationalization of the Goods and Services Tax (GST) rate on education and training services, with a special focus on scientific and technological education. The current rate of 18% should be revisited and reduced to 5%, facilitating broader knowledge dissemination and innovation across the country.

Education, the cornerstone of progress, plays an indispensable role in shaping nations. Cultivating a scientific mindset among citizens is pivotal for national development. By lowering the GST rate from 18% to 5% for education and training services that impart scientific knowledge, India can encourage individuals to invest in their intellectual growth without the burden of excessive taxation. This move would not only make education more accessible but would also reaffirm the country’s commitment to nurturing a scientifically inclined populace.

Ongoing GST Configuration

The prevailing GST slabs reveal an inconsistency: while certain sectors enjoy lower tax rates, education has yet to receive such preferential treatment. Essential items like food grains, books, and specific healthcare services are taxed at lower rates than educational services. This discrepancy raises questions about national priorities, prompting speculation about the extent to which education and scientific temper are genuinely promoted. Reducing the GST rate on education and training services would not only address this anomaly but would also underscore the government’s dedication to fostering a knowledge-driven society.

Critics may raise concerns about potential revenue deficits resulting from a reduced GST rate. However, history demonstrates that investments in education and research yield substantial returns for the economy. The contributions of educated individuals to society—through innovative research, technological advancements, and heightened productivity—far outweigh any immediate loss in tax revenue. Moreover, a skilled workforce can attract foreign investments and stimulate long-term economic growth.

Global trends indicate that countries are increasingly incentivizing education to drive innovation and progress. Many nations recognize that easing the financial burden on students and research institutions can propel scientific capabilities forward. Some countries even apply a zero GST rate to education services to underscore their commitment to knowledge dissemination and societal advancement. Drawing inspiration from these examples, India could not only lower the GST rate but also explore the possibility of a zero GST rate for education services focused on scientific and technical learning.

Scientific Landscape and Online Education

A notable aspect of the modern education landscape is the prominence of online education programs. The digital era has revolutionized how knowledge is disseminated and acquired. Online platforms have democratized education, making it accessible to individuals regardless of geographical constraints. Lowering the GST rate for online education services would further amplify this democratization, allowing more learners to access scientific and technical education from the comfort of their homes.

In this context, initiatives like the IMPRI (Impact and Policy Research Institute) programs stand out. IMPRI’s online education efforts are geared toward promoting research and evidence-based policy discussions in India. These programs bridge the gap between academia and policy making, creating a dynamic environment where knowledge is translated into actionable policies. Lowering the GST rate for such online education initiatives, especially those focused on scientific and technological research, would bolster the nation’s research capacity and drive informed decision-making.

The recent success of the Chandrayaan 3 moon mission landing serves as a testament to India’s scientific prowess. This achievement underscores the importance of nurturing scientific temper from the ground up. By reducing the GST rate on education and training services, India can create an ecosystem that fosters such remarkable accomplishments on a consistent basis. The Chandrayaan 3 triumph demonstrates what a scientifically empowered society can achieve and reinforces the need for accessible education and training programs that fuel such endeavors.

Recently certain edtech startups have started to argue in favor of reducing GST as they advocate the democratization of education. As per the New Education Policy, 2020 which suggests multimodal learning, there needs to be a reduction in the GST slabs. If we want holistic, multimodal education, then we have to look at all components and remove the tax burden so that we can truly make education affordable.

According to an edtech CEO, “Looking at the increasing cost of education in the country, long-term tax exemption, lowering GST on educational services and continued funding support will help edtech firms in exploring and investing in physical learning formats and allow them time to rebound and attain profitability.” Edtech players also expect support for creating the infrastructure needed to implement the NEP and funds to flow into areas such as digital learning, teacher training, and the development of research infrastructure.

Apart from EdTech’s various think tanks and policy institutes are also striving to take education onto the next level by giving free access to excellent minds and providing them with a platform to grow and learn. IMPRI is doing a great job in this regard. It is working efficiently in the digital space, and it has made learning easier, accessible and affordable. Lowering the GST rates would encourage organizations such as IMPRI to take education on a whole new level.

In the UK most universities do not pay VAT or any Corporation tax. Same is the case with the USA. Even the edtech firms and other organizations in the USA are tax exempted. In the USA, a system of American Opportunity Tax Credit (AOTC) is followed, there are certain students who receive aid for their higher education. No such system is followed in India.

In conclusion, recalibrating the GST rate on education and training services from 18% to 5% represents a monumental stride toward reshaping India’s scientific and technological landscape. By fostering accessible and affordable education, the nation can nurture a generation of informed and innovative thinkers capable of propelling global advancements. This reform would elevate India’s standing in the scientific community and align its tax policies with its educational aspirations.

As the world attests to the transformative power of education, India has a unique opportunity to demonstrate its dedication to fostering scientific temper and knowledge acumen through comprehensive reform that places education at the core of its progress. Special emphasis on online education, including initiatives like IMPRI programs, would further solidify India’s commitment to shaping a brighter future through knowledge and innovation. The triumph of Chandrayaan 3 reminds us of the possibilities that arise when scientific temper is nurtured, driving us to craft an education landscape that amplifies such successes.

Read more by the author: Union Budget 2023-24 and Urban Infrastructure and Development Financing: Promising Yet Concerning

  • IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

  • Arjun Kumar

    Arjun Kumar is the Director of the Impact and Policy Research Institute (IMPRI), New Delhi. He holds a PhD in Economics from the Centre for the Study of Regional Development, School of Social Sciences, Jawaharlal Nehru University (JNU), New Delhi. With training in development economics, he specialises in quantitative and qualitative research methods, econometrics and the use of statistical software to crunch big data. He has been a Visiting Faculty at the Institute for Human Development (IHD) amongst others and has been associated with several think tanks, research institutes, governments, civil society organisations, and private enterprises. He is President of a Jharkhand based NGO (registered in 2010), Manavdhara- a youth social organisation working for humanitarian causes in backward regions and for marginalised communities. He has also taught Economics at the University of Delhi. His research interests are in the economy, development studies, housing and basic amenities, urban and regional research, inclusive and sustainable development, data and evidence-based policy, and, research methods. He has several research publications to his credit and has experience of being involved in research projects of international and national repute. He is also a member and part of various government and non-government formed committees, groups, and advisory boards overseeing the deliberation as subject matter expert and for possessing strong research acumen. He is an avid writer and frequently writes on various dimensions of economic issues, policies, and their impact for several eminent media platforms.

  • Samriddhi

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IMPRI, a startup research think tank, is a platform for pro-active, independent, non-partisan and policy-based research. It contributes to debates and deliberations for action-based solutions to a host of strategic issues. IMPRI is committed to democracy, mobilization and community building.

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