THE Indian Institute of Technology-Delhi (IITD) and a few other top-ranking research and academic institutions have received notices for payment of Goods and Services Tax (GST) for research funding they received in the past five years. The amount for IITD, with interest and penalties, is said to be Rs 120 crore. While the academic and scientific community has not reacted to the issue openly, entrepreneur and investor TV Mohandas Pai has called it “tax terrorism at its worst”. Just a month ago, Finance Minister Nirmala Sitharaman increased the customs duty on lab chemicals from 10 per cent to 150 per cent in the Budget. Enzymes, reagents and chemicals of high purity are crucial for research and they are usually imported. The bizarre move sent the scientific community into a tizzy as this overnight increased the cost of ongoing and future projects. The steep hike was rolled back in response to an outcry by scientists in the media and on social media platforms.
These are not isolated incidents that one could brush aside as bureaucratic oversight, but seem to be part of a process to undermine public-funded research and higher education. The tax notice on research funding comes a couple of years after the increase in GST rates on technical tools from 5 per cent to 18 per cent. This made the procurement of scientific and technical instruments, equipment, accessories and consumables very costly. Worried at the likely impact on scientific research, the office of the Principal Scientific Adviser (PSA) sent a note to the government mentioning that “while the private organisations may gradually absorb the impact of rate changes, there is a limited space for public-funded organisations to absorb the impact”. The Ministry of Finance tried to pacify the PSA, promising additional allocation of funds to cover the actual impact of the GST hike. Still, the government has done little to ease the situation, as is clear from the recent GST notices and the (now withdrawn) customs duty hike on lab chemicals.
Research and innovation can flourish in an environment where the government adequately funds research, encourages collaboration and creates a suitable ecosystem (regulation, taxation, etc.) to boost research and development. On all these counts, India is doing badly.
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