Defence MSMEs undertaking R&D receive GST notices, dub them as “tax on innovation”

Private industry sources said that the notices might have come since the MSMEs do not know how to position the government funding in their books of accounts.   Private starts-ups and other MSMEs are receiving notices to pay 18 per cent taxes under the CGST Act on funding received from the Ministry of Defence for research and development (R&D). Government officials say this amounts to “tax…