Indian government sources told this writer thus: “Tax evasion from a school (read AES) which is charging so much from the students is a willful deceit of Indian laws.”
The American Embassy School must be among the most expensive schools in the country where lots of rich Indians send their wards to in the hope of securing a better future for them in the US years later. See the AES fee structure. A pre-Kindergarten child is charged $10,310 annually in tuition fee, a Grade 6-8 student is charged $21,690 annually and a grade 11-12 student is charged $22,390. This is only tuition fees. There are other fees like the application fee of $300 (which is non-refundable), a registration fee (KG-Grade 12) of $11,110, registration fee (pre-K) of $ 5,110 and English as an additional language (EAL) support fee of $ 2500. Then there is a lunch fee of $550. Over and above all this, there is a bus fee too which ranges from $1,170 to 1,800, depending on the distance.
Sources have told this writer that what has stumped the Americans is that many of their diplomats have their spouses working in the American School or elsewhere but they have not been putting these incomes on record. Moreover, when the AES started, the Indian government had given certain leverages and concessions to the Americans, including exempting the school and a particular number of its faculty members from income tax. The problem is that the Americans have unilaterally elongated the tax-exemption list sizably. There are many staffers in the US embassy in New Delhi, mostly Americans, who have been evading taxes as per Indian laws for years for the simple reason that Indian government has been turning a blind eye to this malpractice. However, the Devyani episode has forced India to call the Americans’ bluff.
The Americans were at the wrong end of the stick several years ago when the American School in Mumbai was found to be indulging in the same malpractices and as a result of the intervention of the Bombay High Court the Americans were made to shell out huge money (with arrears) to India. The current scenario looks the same.