IIT-Delhi Receives Rs 120 Crore GST Notice For Research Funds; Check Details

The report also indicates that several other educational institutions, including central universities, IITs, and both state-run and private universities, have received similar notifications

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, according to a report by The Times of India. The notice demands that the institute pay Rs 120 crore in GST, along with interest and penalties, for research funding received between 2017 and 2022. IIT-D has been given 30 days to justify why this amount and any associated penalties should not be levied. 

The report also indicates that several other educational institutions, including central universities, IITs, and both state-run and private universities, have received similar notifications from GST authorities.

While IIT-D has not yet responded to the notice, a senior official from the Ministry of Education informed The Times of India, “We believe this is a misinterpretation. In our view, GST should not be imposed on government-funded research. Regrettably, such notices are issued. We ought to encourage and support research rather than seeing it as a taxable entity.”

In response to the development, the head of a private deemed university commented, “Implementing GST on research funds to universities is a ‘major setback’ for the growth of Indian higher education institutions. The finance ministry has failed to notice that a significant amount of the money is being utilised to buy consumables and assets that are already covered by GST,” reported Business Standard.

The head of a private deemed university expressed concern that treating educational institutions as sources of tax revenue will only drive up the cost of education. Earlier this week, Mahindra Holidays & Resorts India reported receiving a tax demand notice of approximately Rs 16.77 crore, which includes a penalty. The company is reportedly taking steps to seek legal remedies through the appropriate channels.

In a separate development, GST authorities have issued a notice to Infosys for Rs 32,403 crore related to services obtained from overseas branches over the past five years, beginning in 2017. In a filing with the stock exchange, Infosys described the notice as a ‘pre-show cause’ notice and maintained that it believes GST does not apply to these expenses.