‘India setting bad example’: GST on research grants, penalty irk academics

Several universities and aided educational institutions across India have received notices from GST intelligence demanding the payment of Goods and Services Tax (GST) with a penalty for the research grants they had received between 2017 and 2022.

Sources said the authorities of IIT-Delhi and Chennai’s Anna University have been given a month’s deadline to pay the tax and penalty. The imposition of GST on research grants has shocked scores of research students and the education fraternity.

Academics miffed

Educationists have criticized GST intelligence for treating research projects as a taxable entity. IIT Delhi and Anna University were asked to pay Rs 120 crore and Rs 36 crore in GST, respectively. Sources in the Tamil Nadu higher education department confirmed that the notice would be challenged in court, citing how consumables purchased for the research were already taxed, making additional taxation unethical.

On the condition of anonymity, a professor from Anna University told The Federal that the notice from GST had irked many researchers.

“In many cases, we receive grants after a big delay. GST on research grants would actually affect the quality of research. Already, we are forced to buy consumables based on the lowest bid; now, with this taxation, it would be difficult to produce a productive research project,” said the professor.

Demotivating students

Another professor pointed out that charging GST would be another roadblock that would demotivate students involved in research projects.

“Departments such as electrical and electronics, life sciences, and chemistry are already suffering due to poor grants. The market price for many chemicals and electronic goods is quite high. Purchasing these items for research using grants is itself a big hurdle; with the GST burden, it would affect the quality of the work,” he told The Federal.

“India setting bad example”

Educationist D Nedunchezhiyan criticized the issuance of the notice to universities by GST. “Instead of spending education cess funds, the Union government has been focusing on extracting GST from research grants. This is a bad move and a bad example. Several renowned institutions across the globe assist students with research grants because research is the base for the development of the country. But India is setting a bad example with this move,” said Nedunchezhiyan.

He pointed out that several research institutions are in a pathetic state, unable to receive enough funds to utilize the talent pool. “Scholarships and grants are essential to equip the young talent of the country who are working on solutions. Charging GST is detrimental to the growth of the country,” he said.

He cited the example of free education being gradually stopped in many premier institutions, including the Indian Institute of Space Science and Technology, which has forced many first-generation learners to avoid important sectors.