The notice, demanding Rs 120 crore in GST on research grants received between 2017 and 2022, has ignited concerns about the implications of taxing educational institutions in India.

The Indian Institute of Technology-Delhi (IIT Delhi) has been at the centre of a growing controversy following a show-cause notice issued by the Directorate General of Goods and Services Tax ( GST ) Intelligence. The notice, demanding Rs 120 crore in GST on research grants received between 2017 and 2022, has ignited concerns about the implications of taxing educational institutions in India. The notice, which includes demands for interest and penalties, has raised alarms across the educational sector. IIT-Delhi has yet to make a formal statement on the matter, but sources within the Ministry of Education have criticised the move. The notice gives IIT-Delhi a 30-day window to respond and justify why the amount should not be levied along with the associated penalties. Despite repeated attempts, IIT-Delhi’s administration has remained silent, with the head of the institution not responding to calls or messages. The issue, however, is not isolated to IIT-Delhi. Several other educational institutions, including prominent IITs, central universities, and both state-run and private universities, have reportedly received similar notices from GST authorities. These notices are questioning the exemption status of research grants and suggesting that they should be subject to GST. “Tax on educational institutions is exempted”, stated Raghavendra Rao SVS Advocate and GSTConsultant, Nellore. The broader academic community has reacted strongly to these developments. A leading academician and former head of an IIT remarked on the increasing financial pressures faced by educational institutions. “GST, along with other government regulations like the GEM (Government e-Marketplace) portal, Global Tender Enquiry (GTE), and General Financial Rules (GFR), is placing undue strain on our institutions. We are not increasing funding, yet we are taking back money through GST,” the academician said. Adding to the concerns, the head of a private deemed university, who also received a similar notice, spoke on the condition of anonymity. “Imposing GST on research grants is a significant setback for higher education in India. A large portion of these grants is used to purchase assets and consumables, which are already subject to GST. Viewing educational institutions as tax revenue sources will only drive up the cost of education,” the official noted. The controversy has also sparked tension between the Union and Tamil Nadu governments, with the Chennai zonal unit of the Directorate General of GST Intelligence demanding Rs 5.4 crore in GST from Anna University on research grants received between 2017 and 2022. As this issue unfolds, it raises critical questions about the future of research funding and the financial sustainability of educational institutions in India.