Held in the case of Indian Medical Association Vs Union of India (Kerala High Court) W.A. No.1659 of 2024 Dated: 11/04/2025
The Kerala State Branch of the Indian Medical Association agitated on the coercive measures by the Directorate General of GST Intelligence in relation to the recovery of tax on various services rendered by the Association to its members. The Association contents that it is not liable to pay tax on such services supplied to its members. However, summons was issued directing it to furnish details of its GST registration, along with its audited financial statements and other relevant financial records for the financial years 2017–18 through 2021–22. The Writ application was filed and the order was passed on 11th April 2025.
Facts :
1. The Indian Medical Association consists of doctors as members. The member-doctors contribute an admission/annual fee, and in cases of certain Schemes (e.g. SSS, PDSS) also a fraternity contribution upon the death/disability of a fellow member doctor to the Association. The pooled sum is paid out to the widow of deceased doctors, disabled doctors, doctors afflicted with specified diseases, etc.
2. The Petitioner believed that, the doctrine of mutuality is a settled precedence hence GST is not applicable on the services rendered to members.
3. Whereas, The said basis of nontaxability was, however, removed by an amendment of the provisions of Section 2(17)(e) and Section 7(1)(aa) read with the Explanation thereto of the Central Goods and Services Tax Act, 2017 [CGST Act] and the Kerala Goods and Services Tax Act, 2017 [KGST Act] that introduced deeming provisions making the supply of services by a Club/Association to its members a taxable supply for the purposes of the levy of tax. The amendment that was introduced through the Finance Act, 2021 was also made retroactive with effect from 01.07.2017, thereby adding to the financial woes of the petitioner.
Relief Sought:
4. The provisions of Section 2(17)(e) and Section 7(1) (aa) and the Explanation thereto, of the Central Goods and Services Tax Act,2017 and the provisions of Section 2(17)(e) and Section 7(1)(aa) and the Explanation thereto, of the Kerala Goods and Services Tax Act, 2017 are unconstitutional and void being ultra vires the provisions of Article 246A read with Article 366(12A), and violative of Articles 14, 19(1)(g), 265 and 300A, of the Constitution of India;
Submission of the Petitioner:
