HC Stays Verdict Declaring VAT on English-Med Schools

VAT on English-Med Schools

The High Court verdict, declaring the value added tax (VAT) imposed on tuition fees of English-medium schools as illegal, has been stayed.

The Appellate Division's order came on Tuesday after the National Board of Revenue (NBR) filed a petition. The four-member bench led by Chief Justice Surendra Kumar has instructed the NBR to file an appeal over the December 12 verdict and fixed January 29 for the next hearing.

A 4.5 percent VAT had been imposed on the tuition fees of English-medium educational institutions in 2012. The VAT was increased to 7.5 percent in the budget for fiscal 2014-15, and was also extended to cover private universities. The tax on university students was dismissed after they launched large-scale protests.

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Account BenefitFollowing the success of the university protests, guardians of English-medium students began protests to remove the tax on tuition fees in the schools. In September 2016, the High Court stayed the collection of VAT after hearing a petition filed by guardians of two students.

The court issued a rule asking why the collection of VAT should not be deemed illegal. The NBR secured a stay of eight weeks on the High Court order after a hearing with the Supreme Court's chamber judge.

More than a year after the petition, the High Court settled the rule with the verdict on December 12, 2016 when it said that imposing VAT on tuition fees of English-medium schools were illegal.