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Introduction

As per Gazette notification no. 45/2017 - Central Tax (Rate) and notification No. 47/2017 - Integrated Tax (Rate) dated 14th November 2017, issued by Ministry of Finance, Government of India, the 5% GST rate is applicable for the following items used particularly for research purpose.

Specified Purchase as Per Notification

  • Scientific and technical instruments, apparatus, equipment (including computers);
  • Accessories, parts, consumables and live animals (experimental purpose);
  • Computer software, Compact Disc-Read Only Memory (CD-ROM), recorded magnetic tapes, microfilms, microfiches;
  • Prototypes, the aggregate value of prototypes received by an institution does not exceed fifty thousand rupees in financial year.
GST Rate Applicability at the rate of 5  on Educational Institution/Universities

Concessional GST rates for such items are as below

  1. The rate of IGST shall be 5% in case of interstate Purchase.
  2. The rate of CGST shall be 2.5% along with SGST 2.5% in case of purchase within the state.

Conditions

To avail the concessional GST rates as mentioned above, the university will have to produce a Certificate to supplier of Goods along with Purchase order. For Purchases as mentioned in point no (a) to point no. (d) Above the Head of the Institution/University, in each case, will have to certify that the said goods are required for research purpose only.

 

Conclusion

Merely having a university/Educational Institution is not sufficient for applicability of notification no. 45/2017 - Central Tax (Rate) or Notification No. 47/2017 - Integrated Tax (Rate), for applicability of concessional 5% tax rate.

If Certificate from Head of the Institution has been submitted to the supplier in each case for purchase of goods also it should be clearly mentioned in the certificate that the goods purchased will be used for research purpose only in the institution than only GST rate will be applicable at the rate of 5% Otherwise normal tax rate at the rate of 18% will be levied on the Educational Institution / University.

 

Disclaimer: The purpose of the article is to enlighten the readers with the above-mentioned Subject so they can understand and follow the learning’s of these notifications. Under no circumstances, the author would be held liable in any way for any damage arising from using this article.

The author can also be reached at casharmaamit1@gmail.com


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Category GST, Other Articles by - CA AMIT KUMAR SHARMA 



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