IIT Delhi faces ₹120 crore GST show-cause notice over research grants
The Indian Institute of Technology Delhi has reportedly been issued a show-cause notice by the directorate general of Goods and Services Tax (GST) Intelligence, demanding ₹120 crore in tax on research grants received between 2017 and 2022, along with interest and penalties.
A senior official from the ministry of education hinted that a response to the notice is being prepared, suggesting that the issue may stem from a misinterpretation as they believe GST should not apply to government-funded research, according to the report.
The official also expressed concern over such notices and said that research should be encouraged and supported, not treated as a taxable entity, as per the report.
Government officials have said that various educational institutions throughout India such as leading IITs, central universities and both state-run and private universities have recently been issued comparable notices by GST authorities.
Notices question GST on exempt research grants
These notices generally question whether research grants, which are currently exempt should actually be subject to GST.
A former head of an IIT suggested that the GST, GEM (Government e-Marketplace) portal, Global Tender Enquiry (GTE), GFR (General Financial Rules) and governance practices are significantly impacting institutions negatively. The academic said that while funding is not being increased and adequate overheads are not provided, the money is effectively being reclaimed through GST.
The head of a private deemed university, who received a similar notice, remarked that imposing GST on research grants represents a significant setback for the advancement of Indian higher education.
The finance ministry has ignored that a large portion of the grant goes toward buying assets and consumables, which are already taxed and warned that treating educational institutions as tax revenue sources will only raise the cost of education, the head has mentioned.