Kerala High Court Strikes Down GST on Services by Clubs to Members as Unconstitutional

The Kerala High Court has struck down provisions of the CGST and KGST Acts that imposed GST on services provided by clubs and associations to their members.

The Court held that such taxation violates the principle of mutuality, where clubs and their members are not treated as separate entities.

It declared Sections 2(17)(e), 7(1)(aa), and the related Explanation of the Acts unconstitutional and unenforceable.

The Court also found the retrospective application of these provisions from July 1, 2017, to be unjustified. Citing Calcutta Club Ltd. (2019) and Ranchi Club (2012), it ruled that “deemed supply” has no constitutional basis.