Intel calls IMA non-charitable, seeks tax; Doctors approach HC to avoid asset seizure

The Kerala chapter of the Indian Medical Association (IMA) has been accused by the Directorate General of GST Intelligence (DGGI) of non-payment of Goods and Services Tax (GST). The DGGI has been investigating the IMA’s activities since November 2022 and estimates their GST liability in the last five years to be over Rs 50 crore. While the exact amount has not been officially determined or served to the IMA, a reminder was issued on June 19 for compliance. The IMA has now applied for GST registration and requested additional time to understand the applicability of GST in their case.

The situation escalated when the DGGI deputy director requested complete details of immovable properties registered under the IMA Kerala State Branch. Concerned about the potential attachment of their properties, the IMA filed a petition in the High Court on June 26 to prevent this action. The IMA argues that their activities are primarily mutual self-help and charitable, believing they fall outside the scope of GST. However, the DGGI claims that over 90% of the IMA’s activities are non-charitable and should be subject to taxation under the Central Goods and Services Tax (CGST) Act.

The DGGI argues that the IMA engages in corporate activities such as insurance schemes and property construction, which generate profits and create additional assets. They also highlight that the IMA’s insurance scheme lacks the mandatory approval of the Insurance Regulatory and Development Authority (IRDA). The IMA counters by invoking the principle of mutuality, asserting that their association of doctors serves themselves and, therefore, no service is provided from one person to another. However, the CGST Act was amended in 2021 to include services among club members as taxable, thereby refuting the mutuality doctrine.

The case is scheduled for a hearing on July 4.