Education is a necessity, but is coaching for competitive exams too? The Central Board of Excise and Customs doesn’t seem to think so, taxing it at 18% under the GST regime. This has made coaching for competitive exams, a preferred way to crack competitive exams costlier. Akshatha Jesudasan examines.
Though education is considered more of a social activity than a business venture, competitive exam coaching centers charging exorbitant fees to train students for various professional examinations seems to have brought in an element of ‘luxury’ in the country’s education scenario.
Taxed at 18 percent post the Goods and Service Tax (GST) implementation, coaching centres and tutorial classes have been kept out of the purview of core educational services.
The Central Board of Excise and Customs (CBEC) states, “The GST Act tries to maintain a fine balance whereby core educational services provided and received by educational institutions are exempt (from taxation) and other services are sought to be taxed at the standard rate of 18 percent.”
While the current policy allows recognised institutions providing degree courses to be exempted from taxation, private coaching institutes are not; this increases the course fee of such institutes, making it inaccessible for students coming from financially weaker backgrounds.
Nonetheless, a lack in advanced individual coaching in most schools and colleges are forcing parents to spend thousands to train their wards in the hope that their children would be able to crack competitive examinations and enter prestigious institutions. Coaching centres offering courses that include lessons for board exams, Common Admission Test (CAT), Joint Entrance Examination (JEE), National Eligibility cum Entrance Test (NEET), etc, also publish their own coaching materials, that are considered to be more advanced by several students who opt for such additional courses.
“Nowadays if you look at the kind of schedules that students and working professionals have, they find it difficult to prepare for competitives on their own. We provide them the push and a structure to prepare for their examinations,” said Shivang Mehta, regional manager (Bengaluru), Endeavor Careers, that has over 20 centres across all major cities in the country. “I will not deny that people cannot study on their own. They can (but) coaching provides a schedule for easy learning. Our institute provides a 24 hour infrastructure, with reading rooms, where students can study at any given time, and have easy access to faculty members. The institute primarily caters to working professionals,” he added.
But while such institutes are fast becoming a necessity for students in an increasingly competitive country, they are not considered a core education facility and saw an increase in taxation post GST.
What used to be a 15 percent Service Tax, is now charged at 18 percent. Education Tax comprises of a 9 percent CGST and 9 percent SGST. With luxury items being taxed the same as coaching centres, extra tutorial lessons can be brought under the ambit of a profitable business model.
“Even when parents do not have the financial backing to afford extra coaching for their wards, they opt for expensive coaching, thinking that their child would become an IIT-ian; but that is not the case. It (coaching centres) comes as a luxury, no doubt about it,” said Saroja Sridharan, principal of Chinmaya Vidyalaya in Bengaluru, who feels that the school syllabus if properly taught is enough for students preparing for the board examinations.
But Mehta feels that coaching centres seem to have become a necessity today. “When I see my students and the people who come for coaching, it is not always parents who are paying for the courses. Somewhere it has become necessary for a student to join a coaching centre,” he said.
Students opting for additional coaching also feel that interactive methods and modern equipment give them an edge over other students preparing for the same examination on their own.
“We were given tablets as an accessory. While our PU teachers gave us practical lessons the teachers from Byju’s provided us with coaching for theory lessons; they taught a lot more than any average institute,” said Maya Bose (name changed), a student of New Horizon PU College. The college had partnered with Byju’s to provide optional additional coaching for its students as part of its summer classes.
Institutes like Byju’s and Endeavor provide interactive methods of learning, using online tutorials and technology, to provide a clearer understanding of concepts. Though this allows space for one on one interactions and customized adaptations of learning modules, increasing learning efficiency among students, it also brings the annual course fee for a class IV student to approximately Rs. 30,000.
“To some extent it makes it easier, but the same problems remain. You are thrown into a classroom and are constantly under the pressure of an overwhelming syllabus and a time crunch to finish it. At the end of the day, competitive exams require us to know a vast syllabus by-heart,” said a student who attended coaching lessons at Byju’s.
But Benjamin Simon (name changed), a 20-year-old college goer said that students can do well even without additional coaching. “Some of these institutes do overcharge students. I have read so many success stories in the papers. Even a newspaper boy’s son had cracked JEE; if he can do it through sheer hard work and determination, surely we can as well,” he said.
Teachers working in private coaching institutes feel that mere schooling is not enough for students and they need additional help to crack competitive examinations.
“A lot of schools don’t exactly cover the portions that need to be covered for an entrance exam. So, supplementary classes need to be provided for students to come up to that level. One aspect of taking additional coaching lessons is covering portions and coming up to that level. Secondly, private coaching helps students focus on a single topic that is required for specific examinations,” said a teacher at Neev Academy.
“Additional coaching is definitely necessary. It need not be in the form of a classroom, per se, but something apart from your normal schooling is definitely necessary. Attending coaching classes give students an idea of the competition that they are up against, and gives them a benchmark to measure their abilities,” he added.
Though coaching centers are taxed at par with luxury items, Mehta said that a wide range of availability of payment options make it affordable for everybody. “People who come for training ask if they can pay in instalments or any other mode of payment where they can pay the amount in parts. So I wouldn’t say it’s a luxury as everyone can afford it,” he said.
Coaching centres seem to have become a successful business model, with new institutions coming up and existing ones opening their branches in cities all across the country.
The catch, however, is that the fee charged by such institutes is at times unaffordable for a majority of the masses.
Chethan Rao (name changed), a teacher said, “The fees is not very low; it is not affordable to everyone; and it should be taxed. There are cheaper supplementaries and cheaper options available, but they are a necessary expense.”
The author is a member of The NewsCart, a Bengaluru-based media startup.