The Centre is likely to revisit the issue of increase in Goods and Services Tax on scientific equipment from 5% to 18%, which had been criticised by the scientific community over its potential impact on India's research capabilities.

Following the July hike, the Department of Science & Technology and the Council for Scientific & Industrial Research have taken up the matter with the office of the Principal Scientific Advisor (PSA) and the finance ministry, expressing their deep concern, ET has learnt.

The PSA is also learnt to have taken it up with the government, explaining the possible impact of such a hike on scientific and laboratory research at a time when India is strongly pushing for innovation and technology under Aatmanirbhar Bharat.

ET has learnt that an exercise is now underway to ease the GST burden on public-funded laboratories and scientific institutions.

While a full withdrawal of the GST hike may not be done, the government is looking to separate the tax component in such a way that additional financial liability is not borne by public-funded research institutes procuring scientific and laboratory equipment, officials in the know told ET.

A provision may also be made in the upcoming budget and the allocation for the funding agencies for scientific institutes – DST, CSIR and Science & Engineering Research Board (SERB) – for the same.

The DST, in fact, has had to step in this year itself to help institutes with the hiked GST, which came into effect from July. The 47th meeting of the GST Council on July 18 in Chandigarh had announced several new rates for a number of goods and services including on scientific equipment.

In the process, it withdrew a 2017 concessional rate of 5% GST allowed for public funded R&D institutes. In effect, in many cases, there was nil GST on many equipment as well, scientists from some of the organisations confirmed. The July meet, however, has brought in new applicable rates on scientific equipment -ranging between 12% and 18%.

Several scientists even tweeted on the issue claiming it would have a ‘crippling effect' on institutes and science, terming it an unfair move and a wrong message to give the scientific community which led the battle against the Covid-19 pandemic with several home-grown innovations. The science academies are also learnt to have expressed concern over the matter.

The issue also drew political attention with Congress leaders terming it an ‘unkind act' and a ‘thoughtless approach' that would make science suffer.

Source: The Economic Times 
https://economictimes.indiatimes.com/news/economy/policy/government-may-revisit-gst-hike-on-scientific-equipment/articleshow/96155660.cms