GST Demand on IIT-Delhi’s Research Grants Sparks Uproar over Taxing Education

The Indian Institute of Technology Delhi (IIT-D) got a show-cause notice from the Directorate General of Goods and Services Tax (GST) Intelligence, demanding Rs.120 crore in GST on research funds received between 2017 and 2022, plus interest and penalties.

While IIT-D has not replied, a senior official from the Ministry of Education called the notice disappointing and argued that they intend to dispute it, claiming that GST should not be applied to government-funded research.

The notice offers IIT-D 30 days to explain why the amount should not be imposed, along with the related penalties.

Despite attempts to contact the IIT-D administration, the institution’s head did not return calls or messages. However, a senior education ministry official acknowledged that a response to the notice is on the way, adding, “We believe this is a misinterpretation. In our opinion, GST should not be levied on government-funded research.”

The official expressed concern, stating, “It’s unfortunate that such notices are given. Rather than perceiving research as a taxed entity, we should encourage and support it.”

According to government sources, other educational institutions in India, including famous IITs, central universities, and state-run and private universities, have recently received similar notices from GST officials. These notices usually query the exempt status of research funding and whether they should be subject to GST.