Why this is a game-changing move for India’s higher education
The GST Council's decision to exempt research and development (R&D) grants to educational institutions from GST is a transformative move for India’s higher education. It reduces financial burdens while fostering public-private partnerships, boosting innovation, and enhancing the scope for global competitiveness. All these will go a long way in strengthening India’s research ecosystem and supporting the ‘Atmanirbhar Bharat’ vision.
In a significant decision that could bolster research and innovation across the country, the Goods and Services Tax (GST) Council has recommended that research and development (R&D) grants provided to educational institutions will be exempt from GST.
This exemption applies to both public and private sector grants given to recognised institutions, including those under state or central laws, or those with exemptions under the Income Tax Act. Finance Minister Nirmala Sitharaman announced the decision during the 54th meeting of the GST Council.
"R&D grants to three categories of research institutions, colleges, or universities will be exempted from GST. These include those recognised under state laws, central laws, or institutions that have income tax exemptions. The exemption will be available to both government and private institutions, and there will be no threshold," she said.
