Case Details : Directorate of Medical Education (2025) 32 Centax 326 (A.A.R. - GST - Ker.)
Judiciary and Counsel Details
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S/Shri Jomy Jacob IRS and Mansur M.I., Members
- Shri S.R. Rajesh, Authorized Representative. for the Applicant.
Facts of the Case
The applicant, the Directorate of Medical Education, submitted an application to the Authority for Advance Ruling (AAR) seeking clarification regarding the applicability of GST on the fees collected from medical officers, nursing staff, and paramedical staff under the Medical Education Department who intend to avail leave without allowance (LWA) for private employment. The applicant clarified that the fee was imposed solely as a regulatory measure intended to discourage indiscriminate availing of such leave, which could detrimentally impact public healthcare delivery. It was further explained that the fee did not involve any element of supply of goods or services, nor was it collected in the course or furtherance of any business activity. The matter was accordingly placed before the AAR, Kerala.
High Court Held
The AAR Kerala held that the Directorate is not engaged in any commercial activity in levying the fee, and there exists no contractual obligation on the part of the applicant to tolerate the act of availing leave. The payment made by the employee does not constitute consideration for any service rendered. The fee is collected as an internal administrative measure and does not involve any supply within the meaning of Section 7 of the CGST Act or the Kerala GST Act. Accordingly, it was held that the fee collected does not qualify as a taxable supply, and therefore, no GST is applicable.
