GST sleuths move to attach property of IMA Kerala against GST dues, Association cries foul

Thiruvananthapuram:"Is Indian Medical Association (IMA) liable to pay GST", this question is now in debate after the GST Intelligence officials move to attach the property of IMA Kerala.

According to a recent report, the Kerala chapter of the association has now approached the High Court seeking an order restraining GST Intelligence officials, their men and agents from provisionally attaching the properties of the association. The association has submitted that there is no need for them to pay GST as the association was registered as a "charitable association", however, according to the GST Intel, 90% of the activities carried out by IMA are categorized as non-charitable.

This comes after the Directorate General of Goods and Services Tax Intelligence (DGGI) sent an email to the Secretary of IMA and requested a comprehensive list of immovable properties registered under the IMA Kerala branch. Previously, the GST Intel officials had issued a notice to IMA on June 19 requiring compliance with the GST laws.

Allowing an interim relief to the association in this regard, the HC bench of Justice C.S Dias clarified that no coercive action will be undertaken till the next hearing of the case on July 6, 2023. The matter will be considered tomorrow.

"The interim order dated 30.06.2023 is extended till 06.07.2023. Post on 06.07.2023," the HC bench ordered during the hearing of the case on July 4, 2023.

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As per the latest media report by Tax Scan, the GST Intelligence demanded IMA Kerala to pay the GST liability after conducting a series of investigations since November 2022. Even though IMA Kerala Chapter has functioned outside the tax network until now, GST officials stated that the association was liable to pay GST as the activities of the association are non-charitable.

On the other hand, IMA has opined that there is no need for them to pay GST as the association was registered as a "charitable association". Further, the association pointed out that their activities did not fall under the purview of GST.

The Daily adds that according to the GST Intel, 90% of the activities carried out by IMA are categorized as non-charitable. Additionally, the Central Goods and Services Tax (CGST) Act, 2017, specifically classified the activities of the association as business-related. Therefore, such activities are subject to GST. Further, GST intelligence revealed that IMA also runs liquor bars, insurance and contract apartments for its members.

DGGI officials have asserted that the insurance scheme that IMA implemented lacked the mandatory approval required from the Insurance Regulatory and Development Authority (IRDA). Apart from this, the association also has constructed residential apartments in the State without fulfilling the tax obligations.

After being issued a notice by DGGI demanding compliance with the GST laws, the association was compelled to initiate the process of applying for GST registration. Responding to the notice dated June 19, IMA submitted a reply and requested additional time for completing the registration procedure.

However, DGGI sent an email to IMA on June 23rd and sought a comprehensive list of immovable properties registered under the IMA Kerala Branch. Following this, IMA on June 29th approached the High Court bench and sought an injunction to restrain the GST officials from attaching the properties.

In its plea before the HC, the association claimed that there is a correlation between the contributed and the participants, all of whom are medical practitioners. The association argued that no services are provided by any external individuals, and it establishes the "Doctrine of Mutuality". IMA argued since all the members know each other and there are no external parties involved in providing the services, this doctrine is applicable in this case.

To view the order, click on the link below:

https://medicaldialogues.in/pdf_upload/kerala-hc-order-july-4-213552.pdf

https://medicaldialogues.in/pdf_upload/kerala-hc-order-213549.pdf

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