On Friday, 16th August, the Indian Institute of Technology-Delhi (IIT-D) was issued a show-cause notice from the Directorate General of Goods and Services Tax (GST) Intelligence, seeking ₹120 crore GST on research funds acquired by the institute between 2017 and 2022, along with interest and penalties. The notice has ignited concerns about the government allegedly taxing education grants provided by the government itself.
A senior official from the Ministry of Education while talking to Times of India called the notice disappointing and claimed that it intends to challenge it, arguing that GST should not be applied to government-funded research. The notification offers the institute 30 days to explain why the amount should not be imposed, along with the corresponding penalties.
“We believe this is a misinterpretation. In our opinion, GST should not be levied on government-funded research,” a senior education ministry official was quoted as saying. “It is regrettable that such notices are issued. Instead of viewing research as a taxable entity, we should be fostering and supporting it,” it added.
According to the reports, other educational institutions in India, including famous IITs, central universities, and state-run and private universities, have also recently received similar notices from the GST officials. These notices question the exempt status of research funding and whether they should be subject to GST.
A well-known academician and former head of an IIT stated, “The Gs: GST, GEM (Government e-Marketplace) portal, Global Tender Enquiry (GTE), GFR (General Financial Rules), and Governance, which are essentially hurting the institutions where it hurts the most. We are not even increasing the funding and not providing decent overheads and taking back the money through GST.”
One of the heads of a private deemed university also commented on the issue on the condition of anonymity. While talking to TOI, he said, “Imposing GST on research grants to universities is a major setback for the progress of Indian higher education institutions. The finance ministry has overlooked the fact that a substantial portion of the grant is used for purchasing assets and consumables, which are already subject to GST. Viewing educational institutions as sources of tax revenue will only increase the cost of education.”
Earlier on Wednesday, 14th August, there was a clash between the Union and Tamil Nadu governments when the Chennai zonal unit of the Directorate General of GST Intelligence ordered that Anna University pay Rs 5.4 crore in GST on research funding received between 2017 and 2022.
The Indian Institute of Technology Delhi has received Rs 470 crore in research funding. Last year, the institute published 4,000 research publications, which helped to enhance its global rankings. Despite a modest fall in placements, IIT Delhi has witnessed a surge in PhD aspirants and intends to expand PhD placements.
