Many of the Educational institutes in India such as IITs and IIMs, may have to pay service tax from the next financial year. They may have to pay 12.2% of the fee the institutions charge from companies to come for campus interviews.
These institutions are not liable to pay taxes because the law says that the service tax should be levied on a service provided to a client, by a manpower recruitment or supply agency in relation to the recruitment or supply of manpower, temporarily or otherwise, on any manner.
The service tax was earlier applicable to commercial concerned services and the Central Board of Excise and Customs (CBEC) had said that IITs and IIMs not commercial concerns.
