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Education bodies fail to pay VAT

February 07, 2006 12:51 IST
While the government is pushing for compliance with the value added tax regime, state-run institutions like the National Council of Educational Research & Training, Central Board of Secondary Education, Indira Gandhi National Open University and National Institute of Open Schooling are holding back its payment.

"The matter is being examined by our finance committee," Shiv Kumar, chief production officer, NCERT, said.

The dispute that has remained unresolved since April 2005 pertains to VAT on printing job work. Ignou too is yet to decide on payment of VAT on printing job work.

CBSE has not paid VAT for April-October 2005 and is paying a lower amount for periods after that. "We have not paid VAT to printers in Delhi for April-October 2005. From November onwards we are calculating VAT at 3.2 per cent," a technical officer at CBSE said.

The Delhi printers have put in their protest before the VAT authorities. "Various government departments like Central Board of Secondary Education, Delhi Book Trust, Ignou and NIOS have not paid our bills and have refused to pay VAT," Arun Beri of Delhi Printers Association said.

The stalemate over non-payment of VAT has continued despite the office of the Commissioner Trade and Taxes clarifying that VAT has to be paid.

In letter number F1(99)/policy-1/2005/1418 dated August 5, 2005, the CTT informed NCERT that agencies empanelled for the job of printing and scanning were engaged in the business of transfer of goods and liable to VAT at 12.5 per cent.

The amount of VAT and bills being held back by these agencies since April 2005 is not available, but is estimated to be a large sum as these agencies are the major provider of printing job work for education-related publishing.

"Many of our members have complained to us that their bills have been held back as the agencies are not recognising VAT," Beri said.

Non-payment by government-owned institutions is also breaking the VAT chain and printers are not able to claim credit for input VAT paid by them on items like ink etc. While NCERT had disputed the rate of 12.5 per cent, it has not cleared payment even after 4 per cent was notified in the recent months.

Ashish Aggarwal in New Delhi
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