Education Ministry steps in after IITs get GST notices
academic institutions, including the Indian Institute of Technology received notices from goods and services tax (GST) authorities for non-payment of tax.
«The ministry of education has taken up the matter with the finance ministry. It is looking into it, » said a government official, privy to the development.
A host of academic institutions countrywide including IIT-D have been served show cause notice seeking explanation on non-payment of tax on funding support for research by GST authorities. Notices have been sent by the Directorate General of GST Intelligence for the period between 2017-2022.
The representation could be taken to the GST Council when it meets next on September 9. Typically, institutions receive two types of funding. One type of funding is not specific to any particular subject, but in some cases funding may be tied up to a specific area of research or a product with commercial application. Another official said the notices sent out deals with the latter, which was taxable even under the erstwhile service tax regime.
The government had clarified earlier that if the recipient (of grant or donation) is not obligated to do anything specific for the donor then there is no element of 'service' liable to GST.
Industry has questioned levy of GST on research grants received by academic institutions with India lagging behind severely behind its peers on research and development funding.
India spent 0.64% of its GDP on R&D in 2020-21, while the same amongst other developing BRICS countries was-Brazil
