The Directorate General of GST Intelligence (DGGI) has submitted additional evidence before the Kerala High Court to show that the Indian Medical Association (IMA), an organisation of allopathy doctors, is not a charitable organisation but a corporate entity involved in product endorsement, land deals, and profit generation.
After a series of investigations into IMA activities since November 2022, the DGGI pulled up the doctors’ body for non-payment of Goods and Services Tax (GST) in June 2023. According to the DGGI, more than 90 per cent of IMA’s activities are non-charitable. It wants the IMA brought within the GST net.
The IMA, in turn, had invoked the ‘principle of mutuality’, which essentially means no person can transact with oneself. In other words, the IMA calls itself an association/club that was formed exclusively for its members, and therefore exempt from tax. Those who pay and those who benefit are doctors.
“There is identity between the contributors and the participants (all are doctors) – consequently, per the established doctrine of mutuality there can be no service by one person to another,” the IMA says in the writ petition it filed in the High Court last year.
The Union Government has now sought to dismantle IMA’s “mutuality” argument in the High Court. “Many of its activities deviate from the principle of mutuality,” said an affidavit filed by the DGGI deputy director before the High Court on February 27. The affidavit stated that various activities of the IMA were in the form of commercial transactions that involved non-members.
Charitable liquor sales
One example was a liquor bar owned by the IMA Cochin Charitable Society at Palarivattom selling liquor to outsiders, and non-members. “The IMA’s primary objective is to promote public health. Yet, the IMA is running a bar and claims to be a charitable society. What’s this, India’s first charitable bar?” a top DGGI source said. A receipt for the sale of three beer bottles and a carry bag issued to a non-member was produced in the court.
Another was the renting out of rooms in IMA House to non-members. The DGGI submitted a tax invoice that showed that a room in the IMA House Kochi was billed at Rs 2,300 a day for a non-member, the DGGI deputy director himself.
Read more at: ONmanorama
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