The issue of sending GST notices to IIT Delhi and various other educational institutions has become more heated. After widespread criticism on this issue, two ministries of the Modi government have now come face to face. The Education Ministry has raised this issue before the Finance Ministry.
The issue may be raised in the GST Council meeting
According to a report by ET, the Ministry of Education has raised the issue of various educational institutions receiving GST notices before the Finance Ministry and now the Finance Ministry is looking into the matter. ET has given this information quoting a government official associated with the matter. It is being told that this issue can also be raised before the GST Council. The GST Council meeting is scheduled to be held on September 9 early next month.
Demand of 120 crores from IIT Delhi
In a related case, the Directorate General of GST Intelligence (DGGI) has sent a tax demand notice to several academic institutions including IIT Delhi. In the notice sent to IIT Delhi, DGGI has demanded Rs 120 crore, which includes tax arrears, interest and penalty. This matter has already been mired in controversy, because the notice of arrears has been sent for the research grant received by IIT Delhi.
Notice has been sent for this funding
DGGI has sent a show cause notice to IIT Delhi regarding the research grant received between 2017 and 2022 and has demanded Rs 120 crore. In the notice, IIT Delhi has been given 30 days to explain the reason and it has been asked why tax including penalty should not be recovered on the concerned grant.
Mohandas Pai had said tax terrorism
Many people including former Infosys CFO and entrepreneur Mohandas Pai have criticized the government on the GST notice sent to IIT. Pai had shared a news related to this on social media platform X and called the matter tax terrorism. He had asked the Modi government whether there is no limit to tax terrorism? This notice sent to IIT Delhi means imposing tax on education.
Liability is created on this type of funding
ET’s report, citing another government official, said that educational institutions generally receive funds in two ways. The first is funding, which is not linked to any specific subject. Some funding is for products with commercial applications or for specific research. GST liability arises in case of commercial application. Even in the old service tax system, tax was payable in such cases.
Also read: When GST department sent demand notice to IIT Delhi, Mohandas Pai again remembered ‘tax terrorism’
