The Indian Institute of Technology Delhi which is known as IIT Delhi receives GST notice of ₹120 Crore which is a show-cause notice from the Directorate General of Goods and Services Tax (GST) Intelligence. The notice demands ₹120 crore in GST from the research funds received by IIT Delhi between 2017 and 2022 including interest and penalties. According to reports IIT Delhi has been given 30 days to respond and justify why the amount and penalties should not be imposed.
As IIT Delhi Receives GST Notice of ₹120 Crore it is not alone in this situation as several other educational institutions including central universities, other IITs and even state and private universities have reportedly received similar GST notices. The move has caused criticism from education experts and industry leaders.
Mohandas Pai Criticizes the GST Notice
Former Infosys CFO and well-known industry figure Mohandas Pai reacted strongly to the notice. He called it an example of “tax terrorism” and voiced his concern directly to Prime Minister Narendra Modi. In his social media post Pai questioned the rationale behind taxing research grants and asked whether there is any limit to what he termed as “tax terrorism.”
GST demand on IIT-Delhi's research grants sparks controversy over taxing education PM @narendramodi Sir Again tax terrorism at its worst? What is happening with @gstindia @cbic_india ? Is there no limit to tax terrorism? Sad https://t.co/30v39NhDo4
— Mohandas Pai (@TVMohandasPai) August 15, 2024
Concerns About Taxing Research Funds
A senior official from the Ministry of Education suggested that the situation of IIT Delhi Receives GST Notice of ₹120 Crore might be a case of misinterpretation. The official emphasized that government-funded research should not be subjected to GST expressing concern that such actions could hinder the progress of education and research.
Experts from the education sector repeated this. The head of a private university described the GST on research grants as a “major setback” for Indian higher education. They highlighted that much of the funding is used for purchasing equipment and consumables which are already taxed under GST.
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Similar GST Notices to Other Institutions and Companies
IIT Delhi’s notice is part of a broader pattern. Recently Mahindra Holidays & Resorts India disclosed receiving a GST notice for ₹16.77 crore including penalties. Additionally Infosys was issued a notice demanding ₹32403 crore for services provided by its foreign branches over the last five years. Infosys labeled this as a “pre-show cause” notice and expressed confidence that GST should not apply to these services.
Public Reactions and Calls for Reform
The GST notice to IIT Delhi has triggered significant public debate. Many experts and social media users have questioned the complexity and ambiguity of GST laws. Critics argue that tax laws should be straightforward to avoid such disputes and ensure clarity regarding tax liabilities.
Even political organizations have weighed in. The National Students’ Union of India (NSUI) condemned the notice to IIT Delhi calling it unjustified and detrimental to research and education in India.
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