The Directorate General of Goods and Services Tax (GST) Intelligence has issued a show-cause notice to the Indian Institute of Technology-Delhi (IIT-D), demanding the payment of Rs 120 crore in GST, along with interest and penalties. This demand is linked to research funding received by the institute between 2017 and 2022.
IIT-D has been given 30 days to justify why the amount and associated penalties should not be levied. The Times of India reports that similar notices have been sent to other educational institutions, including central universities, IITs, and state-run and private universities.
A senior official from the Ministry of Education described the notice as a "misinterpretation," arguing that GST should not be imposed on government-funded research. The official emphasized that research should be encouraged and supported, not treated as a taxable entity.
The head of a privately deemed university also criticized the move, calling it a "major setback" for Indian higher education institutions. The official noted that much of the research funding is spent on consumables and assets already covered by GST and that taxing these funds will only increase the cost of education.
In a separate development, Infosys received a pre-show cause notice from GST authorities for Rs 32,403 crore related to services obtained from overseas branches over the past five years. In a stock exchange filing, the company maintained that it believes GST does not apply to these expenses and is expected to pursue legal remedies.