A recent social media post has gone viral, claiming that the Patanjali Research Foundation has been granted a five-year tax exemption, while the Indian Institute of Technology (IIT) in Delhi was issued a Rs 120 crore Goods and Services Tax (GST) show cause notice. However, an investigation by India Today Fact Check has found that these claims are misleading.
Patanjali Research Foundation was recognized as a research association under the Income Tax Act, 1961, in July 2021, which allows companies that donate to the foundation to claim deductions under income tax. However, this does not make the foundation tax-exempt. Similarly, entities that fund research activities in IITs can also claim income tax deductions under the same law, which has been applicable to IIT-Delhi since 1976.
Regarding the IIT-Delhi situation, the institute did receive a show cause notice from the Directorate General of GST Intelligence in August 2024, demanding Rs 120 crore in GST on research grants received between 2017 and 2022. However, the 54th GST Council meeting, held on September 9, 2024, recommended GST exemptions for research funds received by institutions established under the central and state governments or institutions that obtained income tax exemption under section 35 of the Income-Tax Act, 1961.
A notification issued by the Central Board of Indirect Taxes and Customs on January 28 clarified that research funds are exempt from GST, which was confirmed by Finance Minister Nirmala Sitharaman in a press briefing. GST expert Amit Singhania also attested that research funds are exempt from GST as per the decisions taken at the 54th GST Council meeting.
In conclusion, the claims made in the social media post are misleading, and both Patanjali Research Foundation and IIT-Delhi are eligible for tax exemptions under different laws. The investigation by India Today Fact Check has clarified the matter, and it is clear that research funds received by institutions are exempt from GST. The story will be updated if IIT-Delhi provides further clarification on the matter.