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‘Another blow’ — Scientists worry as GST exemption removed for science equipment

GST rate of 18% will apply to all scientific equipment in public-funded research institutes, up from earlier concessional rate of 5%. Scientists call for supplementary grants.

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New Delhi: Much has been made of Indian scientists and their work, especially in the wake of the Covid pandemic. But many scientists are worried about the future of their research after the government announced a revision in the “concessional rate” of 5 per cent GST for scientific and technical instruments bought by public-funded research institutes.

As part of a “rationalisation” move, the “applicable” GST rate — 18 per cent — is effective from 18 July on all scientific equipment. “In effect, this means that our grants have gone down by 13 per cent,” a scientist at a government institute said, off the record.

The order, scientists fear, will impact the prices of all equipment across disciplines, ranging from basics like micropipettes and chemicals, to sophisticated machinery like microtomes (used to cut biological samples into thin segments for microscopic examination) and chromatographs (which separate and identify different chemical compounds).

Taking to Twitter, Dr Amit Tuli, a principal scientist at the CSIR Institute of Microbial Technology, called for funding agencies to request the Prime Minister to “withdraw this ruling”, or else “science will suffer”.

In the same thread, he also mentioned that vendors are already sending emails to amend purchase orders to reflect the new rate.

In November 2017, the government instituted a concessional GST rate on scientific and technical equipment in public-funded research institutes and laboratories.

Following the GST Council’s 47th meeting, chaired by Finance Minister Nirmala Sitharaman, on 28 June this year, a recommendation was made to “rationalise” the exemption. On 13 July, a Central Board of Indirect Taxes and Customs (CBIC) “rescinded” the exemption, with the new “applicable rate” to come in effect from 18 July.

A Finance Ministry official told ThePrint, “The rationalisation of GST on scientific equipment was part of the recommendations of the Bommai Committee report which was accepted by the GST Council in toto.”

Karnataka Chief Minister Basavaraj Bommai was heading the Group of Ministers on GST which was mandated to look into correcting inversions and pruning exemptions on certain items.

Also Read: Disbelief over Modi govt plan to stop funding engineering academy linked to Kalam, Kakodkar

Demand for increase in grants

Several scientists have drawn attention to the GST revision, adding to the woes of the already underfunded field of scientific research in India.

Speaking to ThePrint, a former official of the Indian Council of Medical Research (ICMR) said that even Covid has failed to change the status quo. “Medical research needs more money, GST or no GST. That is my view,” he added.

Arindam Ghosh, a researcher at the Indian Institute of Science, tweeted that the removal of “concessional GST rate” for research equipment was a “blow to the already severely under-funded research ecosystem in this country.

Pointing to the “limited resources” that scientists get to conduct research, Arnab Mukhopadhyay, a scientist at the National Institute of Immunology in Delhi, called for a corresponding increase in grants to offset increased costs.

Amitabha Bandyopadhyay, professor, Department of Biological Sciences & Bioengineering at IIT Kanpur, tweeted that the GST revision would have a “crippling effect”, especially in cases where grants had been sanctioned but equipment had not yet been paid for. An order should be issued, he wrote, to funding agencies to allocate 13 per cent of grant value as “top up”.


Others, however, warn that the process of an upward revision of grants because of a change in tax rates is neither usual, nor is it likely to be speedy. “According to the rules, a PhD candidate will not get her fellowship [money] after five years. If the holdup over equipment buying for a particular project stops work even for a few months, it is a very big issue for these scholars,” explained a senior scientist.

Some members of the scientific community, meanwhile, believe that the matter is being blown out of proportion.

A director of an ICMR institute, speaking on condition of anonymity, said that he did not think the new GST rates would impact research in the long run.

“Most of our research equipment is bought on government money, so this amounts to taking money from one pocket and putting it in another. There are some projects that get money from funding agencies such as WHO etc, and those agencies will have to bear the extra burden, but I do not think research will be impacted significantly,” he said.

No grant ‘overheads’ in India

A scientist at a premier research institute explained to ThePrint on condition of anonymity that the GST revision follows a series of decisions that have affected the availability of funds for researchers in India.

“If you look at Ivy League institutes, there is a provision for ‘overheads’ in all grants that go to the institute for supporting the researcher’s work. In some cases it is as much as 100 per cent,” he said.

However, in India, the scenario is different. “Here, our grants do not come with overheads as such, but there is a fixed ad-hoc amount institutes get, which is between Rs 3 lakh and 5 lakh — it is hardly enough. Earlier the interest earned on a grant was the institute’s overhead, but that too now has to be refunded,” the scientist said.

He added that public-funded institutes no longer have the “financial muscle” to absorb the increased expenditure that the revision of the GST rate will entail.

(Edited by Asavari Singh)

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