In this particular case there are also two types. One that hears the beat but is unable to step on it in time. This is not so uncommon. The other that can’t identify the beat and therefore can’t step.
I personally think that the stepping part is the more difficult one. Most people have their own "natural" gait, and trying to get away from that is really difficult. I think walking exercises are one of the keys. It is tricky to do in class because people like using a visual reference -everybody is walking on the beat, but not because we hear it, but because we see it. I try to break the visual reference by stepping out of the line, or stop and do adornment, or throw in double and half times, but i am not sure if that is actually doing anything.
I think singing / scatting to music is an easier way to get into musicality than movement - the feet don't get in the way. And you can remind them that everybody is a rhythm expert - language is all about rhythms and accented/not accented beats, and everybody can recognize the "rote recitation" rhythm, and the "I think you are not listening" rhythm, the distinct rhythm of syllable stressed indian english. The accent patterns used in tango are primitive in comparison.
(One of the interesting things in this context is working on vals - basically everybody can hum along with basic vals rhythms, but trusting that and getting it into the dance is a different problem)