Are Medical, AYUSH Councils Exempt from GST?
Ahmedabad: The Gujarat High Court has issued a stay on Goods & Services Tax (GST) proceedings initiated by the Directorate General of GST Intelligence (DGGI) against the state medical council, councils of other medicine systems and boards. These regulatory bodies oversee the registration and regulation of practitioners across various medical disciplines, including allopathy, homeopathy, ayurveda, unani, dentistry, and physiotherapy.
The entities involved in the case include the Gujarat Medical Council, the Council of Homeopathic System of Medicine, the Gujarat Board of Ayurvedic and Unani System of Medicine, the Gujarat State Dental Council, and the Gujarat State Council for Physiotherapy.
It stated that these bodies are corporates and have GST numbers as well, for they provide services in lieu of charging fees. Hence, their services are taxable under the GST law.
The DGGI had issued notices to these bodies under Section 74 of the GST Act, asserting that they function as corporate entities with GST registrations and provide taxable services in exchange for fees.
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In response, the councils argued that they are statutory bodies established under specific laws and act as extensions of the government rather than private corporate entities. According to a recent media report in TOI, they contended that their regulatory functions should not be subject to GST, as they primarily serve a public interest rather than engaging in commercial activities.
According to advocate Neel Lakhani, who appeared for DGGI, the councils and boards filed petitions in the HC claiming that they are not taxable persons and demanded that the communication issued by the GST department be quashed.
After reviewing the petitions, a division bench comprising Justice Bhargav Karia and Justice D N Ray issued a notice to the GST department, directing it to respond by May 1. Until further notice, the court has also restrained the department from taking any coercive action against these councils and boards, adds TOI
