State and Central educational institutions are now exempt from paying the Goods and Services Tax (GST) on research grants, announced Union Finance Minister Nirmala Sitharaman today, Monday, September 9. 

This announcement came following the 54th GST Council Meeting that was conducted today, September 9. 

Elaborating on the decision, the Finance Minister in a press conference further said that public educational institutions which received income tax exemption can receive research funds from both the government and private sources. These institutions are exempt from paying GST, she clarified. 

This was also confirmed by Atishi, Education Minister of Delhi, who claimed that the demand to exempt educational institutions from GST on research grants raised by the Delhi and Punjab governments was accepted by the Centre, reports IndiaTVNews. The Aam Aadmi Party (AAP) is in power in both states. 

Earlier this year, several educational institutions such as the Indian Institute of Technology (IIT) Delhi, Anna University in Chennai, Tamil Nadu, Punjab University, Amrita Vishwa Vidyapeetham in Coimbatore, Tamil Nadu and more have received GST show cause notices from the Directorate General of GST Intelligence, for unpaid taxes amounting to Rs 220 crores, reports Mint. 

Many educationists, as well as industrialists such as Infosys Board Member Mohandas Pai, who fund research through private grants, termed this policy “tax terrorism”, and claimed that it could be a “major setback” to research.