Tax sleuths put private universities under lens for evasion

Various private universities have come under the scanner of the central revenue department for alleged service tax evasion worth several crores.

Various private universities have come under the scanner of the central revenue department for alleged service tax evasion worth several crores.

HT Image

The directorate general of Central Excise Intelligence and Central Economic Intelligence Bureau have started a discreet probe in the matter, official sources said.

The officials suspect that various private educational institutions are flouting norms set by University Grants Commission and other government agencies for running their campuses in various states across the country and some abroad.

As per clause 3.3 of the UGC regulation, a private university established under a State Act shall operate ordinarily within the boundary of the State concerned.

However, after the development of main campus, in exceptional circumstances, the university may be permitted to open off-campus centres, off-shore campuses and study centres after five years of its coming into existence, interalia subject to the condition that the off-campus centre shall be set up with the prior approval of the UGC and that of the State Government where the centre is proposed to be opened.

However, it has been come to the notice that many universities were opening their centres in many other parts of the country and abroad, they said.

Sources said the central revenue department officials have carried out a field survey and initiated a probe.

"It is suspected that private universities are allegedly unauthorisedly operating in many states and in some cases abroad by flouting government norms. We are coordinating with the UGC in the matter," a senior official associated with the probe said.

The legal provisions regarding service tax on educational institutions stipulates that any institute or establishment which issues any certificate or diploma or degree or any educational qualification recognised by law is not required to pay Service Tax.

However, off-campus study centres, not affiliated by the UGC, attracts service tax of 12.36% on their total income.