Ahmedabad: The Gujarat high court on Thursday stayed the Goods & Services Tax (GST) department from taking any action against five different councils and boards that regulate and register practitioners of different systems of medicine in the state over payment of taxes.
According to the case details, the director general of GST Intelligence (DGGI) issued notices to 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 under Section 74 of the GST Act.
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.
After getting expert opinion, these councils and boards replied to the department and conveyed that they are not liable to pay GST because they are not private corporate bodies but were formed under the statutes and they act as extended govt bodies. However, the department insisted that these councils and boards are not govt companies, but body corporates and therefore are liable to pay taxes on the services they offer.
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 a preliminary hearing, Justice Bhargav Karia and Justice D N Ray issued a notice seeking a reply from the department by May 1, and directed the department not to take any coercive action against the petitioners until then.
