IIT-Delhi gets notice for Rs 120-cr GST on research funds, given 30 days

Indian Institute of Technology-Delhi (IIT-D) has received a show-cause notice from the Directorate General of Goods and Services Tax (GST) Intelligence, The Times of India reported. The notice demands Rs 120 crore in GST from the premier institute on research funding acquired between 2017 and 2022, as well as interest and penalties.

The notice gives IIT-D 30 days to explain why the sum and any related penalties should not be collected. Several other educational establishments, including central universities, IlTs, and state-run and private universities, have also received similar notifications from GST authorities, according to the report.

While IIT-D is yet to react to the notice, a top Ministry of Education official told 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.”

Reacting to the development, the head of a private deemed university said, “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.”

Viewing educational institutions as sources of tax revenue will only increase the cost of education, said the university head.

Corporates also slapped with tax notice
 

Earlier this week, Mahindra Holidays & Resorts India said tax authorities have slapped it with a demand notice of about Rs 16.77 crore, including a penalty. The company is reportedly taking steps to pursue legal remedies before the appropriate authority in this regard.

Separately, GST authorities have also slapped Rs 32,403 crore notice on Infosys for services availed by the company from its overseas branches for five years starting in 2017. Infosys, in a stock exchange filing, called the notice a ‘pre-show cause’ notice and said it believes the GST is not applicable on these expenses.