International Education Services India organised a live panel discussion on New Education Policy (NEP) and Equalisation Levy (EL) on 16 September 2020. The focus was to discuss the crucial aspects of the New Education Policy, main opportunities for international education destinations, changes around international education policy and how this will change the education landscape in India. 

if you missed attending the live session here is the five minute digest and recording

Panellists:
• Anju Sharma, Principal Secretary, Higher Education, Govt of Gujarat
• Navin Mittal, IAS, Commissioner, Collegiate Education & Technical Education, Government of Telangana
• Pankaj Mittal, Secretary General, Association of Indian Universities
• Vidushi Gupta, Former Lead, Taxation Law at Vidhi Centre for Legal Policy
• Narayanan Ramaswamy, Partner & Head, Education and Skill Development Practice, KPMG in India

Moderators:
• Rajendra Tripathi, Assistant Director - Higher Education, British Council India
• Aatreyee Guha Thakurta, Regional Marketing and Communications Manager, British Council South Asia

Below are the key takeaways:

• With NEP, the focus is on a multidisciplinary and trans-educational approach which is a great opportunity for India to be a global player in the higher education sector.
• It is also a good opportunity for the UK sector to establish some of its best practices in India.
• Many foreign universities are already in touch with the Government of India for collaboration in Higher Education, for example UK and USA universities already have Memorandum of Understanding (MoU) with various state governments in India.
• With foreign campuses in India, it will not only bring investment in India, but also brings international talent to India which further helps in bridging the knowledge gap and also brings innovation in Higher Education.

Some statistics around Indian students who opt for education in any foreign country:

• Students close to 7 to 8 Lakh enrol themselves in any foreign university per year
• Out of that, only 46,000 return to India
• Close to 2 billion dollars per year these students spend on international education

 Pre-requisites for foreign collaboration in India:

• For setting up campuses in India: The university should be in the top 100 rankings globally. This step is not to dilute the quality teaching, as this is the first time the Higher  Education sector has been open to foreign universities and the Government wants to observe the progress first before relaxing the norms. For TNE and dual degree programmes (which the panel mentioned as a 'low-hanging fruit') any foreign university of good standing can be involved and they don’t have to be from the top 100.
• For educational collaboration: Only MoU in line with the University Grants Commission (UGC) and AICTE guidelines would suffice. Such MoUs are already in place between various foreign universities and Indian HEIs, before NEP.

Opportunities for the UK sector in HE in India in International collaboration:

• Faculty development
• Student exchange
• Blended learning
• Collaborative research
• Joint incubation

Benefits to the UK sector:

• Low operational and administrative cost in setting up campuses in India
• Huge faculty base which could help in initial teaching and learning
• The existing mechanism for credit transfer which would help foreign university’s degree validity

Opportunity for the India sector:

• Showcasing vast inter-disciplinary education and non-conventional courses like Ayurveda and Yoga in a foreign country

The regulatory provision in setting up foreign universities in India:

To date, the Indian HE sector was not open to foreign universities and was guarded by the regulatory framework. However, NEP has paved the way with ease of doing business for foreign universities. The regulatory structure has been complex in India, with NEP, these structures have been revamped for the benefit of the international market.

• The proposed regulatory framework under NEP is ‘light but tight’ framework to ensure integrity, transparency, and resource efficiency of the educational system through audit and public disclosure while encouraging innovation and out-of-the-box ideas through autonomy, good governance and empowerment.
• Under this framework, there will be specific regulations for foreign universities which will be different from Indian universities.
• The policy talks about over-arching regulations however the information around detailed procedures and processes is still under discussion.
• The government has clubbed various departments under the umbrella of the High Education Commission to lessen the regulatory burden. AICTE has already made all the procedures online to support foreign universities in India.

Challenges:

• Mutual recognition of degrees which currently focus on duration, mode of delivery, place of learning as well as qualification before recognising the foreign degree in India. However, at Association of Indian Universities (AIU), the institution has been shifted from the duration of the study to credit-based learning to help foreign universities in India.
• Change of mindset right from policymakers to administrators, students for implementation of NEP.
• The digital divide in India where still a section of society does not have access to a proper internet connection with a workable bandwidth.
• Non-recognition of foreign online degrees in India.

Things to consider before international collaboration:

• India being a large country, the focus has also been on mass education. The Internationalisation of education should be dealt with carefully so that mass education should not suffer.
• Blended learning is the future, which not only provides a holistic experience to a student, but is also cost-efficient. However, it should be as per quality standards of both the countries in terms of content, duration, learning objectives and learning opportunities.
• Bilateral relations should be the key while promoting international collaboration. Both countries should benefit from the collaboration and should not be one-sided. India has a huge potential in Higher Education therefore, such bilateral relations would help in mapping the potential in India.
• The focus of the international collaboration should be of quality and this should be ensured in online teaching, content development along with assessment.

Equalisation Levy (EL):
This session was led by the following panellists:
• Vidushi Gupta, Former Lead, Taxation Law at Vidhi Centre for Legal Policy
• Narayanan Ramaswamy, Partner & Head, Education and Skill Development Practice, KPMG in India

The Equalisation Levy was first implemented in India in 2016 with 6% taxation to be paid only for online advertisements in the year 2016. While EL was not part of the Finance 2020 Act, however with the outbreak of Covid-19 and digital transactions (both learning and delivery) becoming the reality of life. Providers of online services gained momentum and Indian government expanded the taxation component to all e-commerce suppliers. Under the new law, it says 2% of consideration of e-commerce supplier services to be paid by any online service provider (owns/manages/operates not from India) who provides services to an Indian resident, or one who provides services to the Indian IP address.

Some of the caveats:

• Liability lies with the online service provider to self-declare the turnover of business. The mechanism of enforcement is yet to be identified. However, tax challenges are available online for foreign providers to pay tax in India.
• The law mentions that the turnover made by the online provider in the previous year must be at least 20 million Indian rupees to be eligible to pay EL this year. If the online provider doesn’t fall under the purview of the above rule, then they are exempt this year, but would be required to pay next year if the turnover crosses minimum benchmark of 20 million INR.
• If the online provider has a permanent establishment with Indian provider who is already paying income tax, then the online provider is exempt from paying tax.

This is only a makeshift arrangement, considering the changes post Covid-19 era. Equalisation Levy would be designed in the main line of tax, rather than a stand-alone EL for foreign establishments who provide online services to Indian residents.

Please note: the above points are personal opinions and interpretations of the Equalisation Levy by the panellists and is not to be considered as legal advice or endorsements.

You can re-watch this Live event here

If you have any questions, please write to vishu.sharma@in.britishcouncil.org