Ahmedabad schools served GST notices worth ₹15 crore

The Goods & Service Tax Department (GST) has issued notices to top international schools and private universities in Ahmedabad to pay a total of ₹15 crore under the Reverse Charge Mechanism.

Reverse Charge means the liability to pay tax is on the recipient of the services instead of the supplier.

Each educational institute has been served a notice for a different amount, which totals around ₹15 crore, said the department sources.

Some have paid the taxes after the notice, while some claim that they were not aware of such a tax.

Sources suggest that international schools have tie-ups with schools abroad where they collaborate with international faculties to offer lectures at the schools. Apart from this, they also conduct workshops and seminars from the faculties abroad.

Transactions involving these, including the amount paid to the foreign schools and faculties, are subjected to taxes.

Sources in the department say that administrators may say that they are not aware of the tax, but in most cases, they form a private company and allot the contracts for workshops, seminars, and lectures to avoid these taxes.

If an international school or a private university opens its own company and takes the service itself, it gets relief from tax and they do not even have to file a return in GST.

If a university or international school files a return in GST, a lot of technical information also has to be provided, so such companies are formed to avoid both the tax and the hassle that comes with filing for the tax