Bangladesh top court stays VAT on tuition fees for 6 months

The High Court yesterday stayed for six months the collection of value added tax on tuition fees of English medium school students.

The court asked the authorities concerned to explain why the imposition of 7.5 percent VAT should not be declared illegal.

The HC bench of Justice Shamim Hasnain and Justice Mohammad Ullah issued the rule in response to a writ petition by two guardians of students at English medium schools seeking cancellation of the VAT.

The court decision comes amid anti-VAT demonstrations by guardians, students and teachers of English medium schools in the capital.

Yesterday, more than 300 demonstrators formed a human chain on footpaths of Saat Masjid Road in Dhanmondi around 11:30am, demanding cancellation of the VAT.

The hour-long protest was held three days after the government withdrew 7.5 percent VAT on private universities in the face of street agitation by private university students in the capital and elsewhere.

The protesters yesterday chanted the slogan "no VAT" and carried placards and posters inscribed with "we are not product", "why VAT on English medium schools only?”, "why this discrimination with English medium schools?"

They said the government withdrew VAT on private universities, but kept it in force for English medium schools. This was illogical and a "dual policy".

"The cost of education in these schools is high, and imposition of the tax was like pouring salt on wounds," said Sharmin Sultana, whose child studies at European Standard School in Dhanmondi.

This VAT adds to the woes of fixed-income people who have to go to great lengths to send their kids to these schools, she said.

"Aren't they children of this country... Why is this discrimination?" she asked.

Ahmed Jamal, whose daughter studies at Siddiqui's International School, said they paid 4.5 percent VAT on admission, tuition and other fees till June last year. But the government increased the VAT to 7.5 percent the following month.

Jamal said he had hoped the government would reduce the VAT this year, but it did the opposite.

Ayana, a standard-seven student of Siddiqui's International School, said, "There should be no tax on education because it is not a commodity."

Sirajum Munira, a teacher at European Standard School, said the scope for education would shrink if the government continued to impose such tax.

S Chowdhury Babu, a guardian, said they would go for tougher agitation after the Eid to force the government to scrap the VAT.

In 2010, the government imposed 4.5 percent VAT on fees and services in English medium schools. In the budget for fiscal 2014-15, the VAT was raised to 7.5 percent.

However, there is no VAT on Bangla medium schools and government-approved English version schools that follow English textbooks published by the National Curriculum and Textbook Board.

In his budget speech this year, Finance Minister AMA Muhith sought to increase the VAT on English medium schools to 10 percent. The move drew huge criticism from guardians and associations of English medium schools.

The government later fixed the rate at 7.5 percent on English medium schools, private universities, and medical and engineering colleges.

On Wednesday, two guardians -- Faizul Islam and Selim Azam -- filed the petition with the HC, seeking cancellation of VAT on English medium schools.

During yesterday's hearing, petitioners' counsel Shahdeen Malik told the court that the VAT imposed on students of private English medium schools was discriminatory since students of no other institutions paid any VAT.

It is the government's duty under article-17 of the constitution to ensure education for all as well as equal opportunity under article-19. VAT on tuition and other fees of English medium students was detrimental to the principle of the two articles, he said.

The chairman of the National Board of Revenue and secretaries to the education ministry and to the internal resources division of the finance ministry were made respondents to the court rule.