IMA calls itself a charitable body but HC brings doctors' club under GST net
Thiruvananthapuram: The Kerala High Court on July 23 said that the services provided by the Kerala chapter of the Indian Medical Association (IMA) to its members came within the ambit of the Goods and Services Tax (GST).
The IMA has all along placed itself outside the tax net by taking cover under the 'principle of mutuality,’ which essentially meant that the association and its members were one. The IMA argued in court that since itself and its member doctors were one, it was illogical to assume that an entity could supply goods and services to itself.
The fundamental reasoning was that a person cannot trade with self. The HC, however, ruled that the ‘principle of mutuality’ would be superseded by the powers conferred on Parliament by Article 246 (A). The Article empowers the Parliament and the State Legislature to enact laws to impose a tax on the supply of goods and services.
In 2021, Parliament had made an amendment to the Goods and Services Act, inserting Section 7(1)(aa). This section included within the meaning of 'supply' the transactions of a club or association with its members or constituents.
