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Universities and research centers that have been established by a law of the Central Government; or established by a law of the State Governments; or that have obtained income tax exemption can receive research funds both from the government and from the private and they would not be subjected to GST payments.
The GST Council, in its meeting on Monday, decided that they are exempt from paying the GST. Delhi Minister Atishi had on Sunday said that she would oppose taxing research grants given to educational institutions at the GST Council meeting. As per reports, in August 2024, several educational institutions in the country were given show-cause notices by the central government for not paying GST on research grants they had received. "The central government is asking for a GST on research grants received from 2017 to 2024, including Punjab University and IIT Delhi... No country in the world imposes a tax on research grants... The central government has reduced the amount of research grants...," Atishi had asserted. "Now that the educational institutions are raising grants on their own, through private or foreign institutions, the central government wants to impose GST on those grants also. and the Delhi government will raise this issue in the GST council tomorrow and demand GST exemption on research grants...," Atishi added. The GST Council, consisting of the Union Finance Minister and representatives from all States and Union Territories, was established in 2017, to make decisions on various aspects of GST, including tax rates, exemptions, and administrative procedures. The GST regime is aimed at removing the inefficiencies and complexities of the previous archaic taxation system. Over the years, GST has, among others, simplified compliance and reduced the cascading impact of tax. Before July 1, 2017, the indirect tax regime was highly fragmented. The Centre and States were separately taxing goods and services. (ANI)
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