New Delhi (India), Sep 9 (ANI): Universities and research centers established by an Act of the Central Government; or established by an Act of the State Governments; or who have received exemption from income tax can receive research funds both from the government and from private and they would not be subject to GST payments.

The GST Council decided in its meeting on Monday that they are exempted from paying GST.

Delhi minister Atishi had on Sunday said she would oppose taxation of research grants given to educational institutions at the GST Council meeting.

According to reports, in August 2024, several educational institutions in the country received notices from the central government for not paying VAT on research grants they had received.

“The central government is asking for VAT on research grants received from 2017 to 2024, including Punjab University and IIT Delhi… No country in the world is facing a tax on research grants… The central government has reduced the amount of research grants…”, Atishi had claimed.

“Now that the educational institutions are collecting grants on their own, through private or foreign institutions, the central government wants to impose GST on these grants as well. And the Delhi government will raise this issue in the GST Council tomorrow and demand GST exemption for research grants. ..”, Atishi added.

The GST Council, comprising the Union Finance Minister and representatives from all states and union territories, was set up in 2017 to take decisions on various aspects of GST, including tax rates, exemptions and administrative procedures.

The GST regime aims to remove the inefficiencies and complexities of the earlier archaic tax system. Over the years, GST has, among other things, simplified compliance and reduced the cascading effect of the tax. Before 1 July 2017, the indirect tax regime was highly fragmented. The Center and the states taxed goods and services separately. (ANI)