Tax on PGP and PGPX is disagreeable, says IIM-A director

The issue of service tax payment by Indian Institute of Management, Ahmedabad is still not clear. The institute has paid twice taxes for its customised programmes that yields income to the institute but thinks that tax levied on its flagship programme PGP and PGPX is disagreeable.

"The matter is not solved yet and continues to be an issue. The last we heard was that the ministry had sorted the matter however it's not the case as of yet. Therefore, we are a little apprehensive about it. I believe that service tax is meant for the advisory and consulting services not for regular courses (PGP and PGPX)," said Samir Barua, director, IIM-A.

It is to be noted that the service tax department issued two show cause notices to the institute demanding taxes to the tune of Rs1.37crore and Rs1.39crore in last two financial years. Sources said that the institute has already taxes for running Management Development Programme which includes consulting and training for the corporates.

According to Barua, services tax for an institute like IIMA that provides education for PGP, PGPX and continuing education for executives cannot be levied. He said that one cannot compare service industry with that of one providing education and hence, the institute doesn't want ST to be levied on its activities.