GST Exemption Confirmed for Universities and Research Centers

The GST Council announced that universities and research centers established by central or state laws, or those with income tax exemption, are not required to pay GST on research funds. Delhi Minister Atishi had opposed taxing research grants at the Council meeting, emphasizing that no country taxes such grants.

Universities and research centers established by central or state laws, or those with income tax exemption, are now exempt from paying GST on research funds, according to the GST Council's latest decision on Monday.

Delhi Minister Atishi stated her opposition to taxing research grants given to educational institutions at the GST Council meeting on Sunday. Reports indicate that in August 2024, numerous educational institutions were issued show-cause notices by the central government for failing to pay GST on research grants received.

'The central government is demanding GST on research grants from 2017 to 2024, including Punjab University and IIT Delhi,' Atishi criticized. 'No country taxes research grants. The central government's reduction in research grants has forced educational institutions to seek private and foreign funding, and now they want to tax those as well. The Delhi government will demand GST exemption at the Council meeting,' she added.

Formed in 2017, the GST Council, comprising the Union Finance Minister and representatives from all States and Union Territories, oversees GST-related decisions, including tax rates and exemptions. The GST regime aims to streamline taxation, improve compliance, and eliminate inefficiencies inherent in the previous system.

(With inputs from agencies.)