IIT Delhi Faces ₹120 Crore GST Notice Over Research Grants

The Indian Institute of Technology Delhi (IIT-D) has received a show-cause notice from the Goods and Services Tax (GST) Intelligence Directorate, demanding ₹120 crore in taxes on research grants from 2017 to 2022, including interest and penalties.

IIT-D has yet to comment on the matter, but a senior official from the Ministry of Education described the notice as unfortunate and said they plan to challenge it. They believe that GST should not apply to government-funded research, according to The Times of India.

The ministry official suggested that the issue might be due to a misunderstanding and hinted that a formal response is in the works. They argued that research should be supported, not burdened with tax.

Government sources revealed that similar GST notices have been issued to various educational institutions across India, including top IITs, central universities, and both state and private universities. These notices question whether research grants, which are currently exempt from GST, should actually be taxed.

A former IIT head commented that regulations like GST, along with other procurement and financial rules, are negatively impacting educational institutions. They noted that while funding isn’t increasing, the costs are effectively reclaimed through GST, despite funding constraints and inadequate overheads.

The leader of a private deemed university who also received a similar notice expressed concern that applying GST to research grants could hinder the progress of higher education in India. They argued that GST on research grants doesn’t consider that much of the grant funds are spent on already taxed assets and consumables, and warned that treating educational institutions as sources of tax revenue could drive up education costs.