GST is exempted for Research Institutions as per 54 GST meeting

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The 54th GST Council meeting recommended exempting research and development services provided by government entities and notified institutions. This exemption applies when the consideration is received as grants. While initially thought to apply broadly, clarification indicates it might be specifically for services funded by government or private grants, even if provided to private organisations. A final notification is pending.

Srimannarayana

Srimannarayana (Querist)

04 December 2024 Ours is a Research Institution we are funded by GOI we are providing Research and development consultancy services. Are these services exempted as per 54th GST meeting

Research and development services supplied by:
(a) Government Entities
(b) Institutions notified under Section 35 of the Income Tax Act, 1961, when consideration is received in the form of grants.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 December 2024 The services you mentioned are recommended as exempt under GST.
According to Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, the following services are exempt:
Research and development services supplied by:
Government Entities [Sl. No. 28 (a)]
Institutions notified under Section 35 of the Income Tax Act, 1961, when consideration is received in the form of grants [Sl. No. 28 (b)].

Srimannarayana

Srimannarayana (Querist)

04 December 2024 Sir but we are providing services to private organization and getting consultancy charges not as grants even though it is exempted? Till yester day we have charged GST@18% under SAC code 998114.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

04 December 2024 It has been recommended as follows:
The GST Council recommended to exempt supply of research and development services by a Government Entity; or a research association, university, college or other institution, notified under clauses (ii) or (iii) of sub-section (1) of section 35 of the Income Tax Act, 1961 using Government or private grants.
Refer: https://gstcouncil.gov.in/sites/default/files/2024-09/pib2053233.pdf
Final notification awaited.

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