IIT-D has been given a 30-day window to respond to the notice, explaining why the demanded amount and associated penalties should not be collected.
The Indian Institute of Technology-Delhi (IIT-D) has received a show-cause notice from the Directorate General of Goods and Services Tax (GST) Intelligence, demanding ₹120 crore in GST on research funding acquired between 2017 and 2022. The notice also includes interest and penalties, placing a significant financial burden on one of India’s premier educational institutions.
This demand has sparked concern within the Ministry of Education, with officials labelling the notice as “unfortunate.” A top ministry representative, quoted by The Times of India (TOI), argued that research funded by the government should be exempt from GST. “We believe this is a misinterpretation. In our view, GST should not be imposed on government-funded research,” the official stated. The representative further emphasized the need to encourage and support research rather than treating it as a taxable entity.
IIT-D has been given a 30-day window to respond to the notice, explaining why the demanded amount and associated penalties should not be collected. This notice is not an isolated case; several other educational institutions, including central universities, prominent IITs, state-run, and private universities, have also received similar demands from GST authorities.
The head of a private deemed university, speaking to TOI on the condition of anonymity, expressed deep concerns over the financial strain these demands would place on educational institutions. The individual described the imposition of GST on research funds as a “major setback” for the growth of higher education in India. They further pointed out that a substantial portion of research funding is already used to purchase consumables and assets that fall under GST, making this additional taxation redundant and burdensome.
The insistence on viewing educational institutions as sources of tax revenue could have far-reaching consequences, increasing the overall cost of education and hindering the advancement of research and innovation in India.
Our Conclusion
The Directorate General of GST Intelligence’s decision to impose a ₹120 crore GST demand on IIT-Delhi’s research funds, along with similar notices to other educational institutions, represents a significant misstep in India’s educational policy. Government-funded research should be exempt from GST, as it is a critical driver of innovation and development in the country. Instead of taxing research, the focus should be on fostering an environment that promotes and supports the growth of knowledge and education. This decision, if upheld, could stifle the progress of Indian educational institutions, ultimately harming the nation’s future.
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