GST Exemption for R&D Services Funded by Notified Entities Under Section 35, Effective October 2024

Heading 9981 outlines a GST exemption for research and development services funded by grants from government entities or specified research associations, universities, colleges, or institutions. These institutions must be notified under section 35 of the Income Tax Act, 1961, at the time of service provision. A "Government Entity" is defined as an authority or body with significant government participation, established to perform government-assigned functions. The document also clarifies the GST payment process for such services provided by government entities, as per Circular No. 245/02/2025-GST. This exemption was introduced by Notification No. 08/2024, effective from October 10, 2024.