I am wondering on the possibility of hiring a student from another university to work in my research project using funds from grant or my IDC funds during regular semester.
Please advise the possibility. If so, how to handle the paperwork.
That's going to be very university specific.
I've never had a grant that cares, but we have university policies designed to discourage this by suggesting/requiring that our students have the opportunity to fill the position first. If your department/unit has an HR person who cares about this, you usually have to formally advertise the position and show that none of our undergraduates who apply are qualified. Most HR folks will let you get away with a short advertising and application period and a pretty specific job description if you have a specific candidate in mind.
Are you wanting to hire a graduate student or an undergraduate? Did you work with the student previously? Are you part of a group that often swap students around (like the Claremont colleges)? I'd chat with someone in HR to see if this is possible or practical.
They would be treated as casual hires rather than student employees. I have to go through HR and post an official job announcement.