No Exemption From GST for Products Sold by Kerala Khadi Village Industries Board | HC

Case Details: Kerala Khadi & Village Industries Board v. Union of India - [2025] 171 taxmann.com 632 (Kerala)

Judiciary and Counsel Details

• Bechu Kurian Thomas, J.
• C. Unnikrishnan, D. Jayakrishnan, Vijaykrishnan S. Menon, Vivek Nair P., M.R. Radhakrishnan, Adeeba Ameen, G. Gowardhan DevG. Nair, V. Ashwin & Sruthi Sreekumar, Advs. for the Petitioner.
• V. Girishkumar, SC, for the Respondent.

Facts of the Case

The Kerala Khadi & Village Industries Board (the Petitioner) was a statutory body under the Kerala Khadi & Village Industries Board Act. It was exempted from VAT and service tax for the sale of khadi and village products before the introduction of the GST Act. However, after the GST Act came into force, the exemption was not continued, and the Petitioner was imposed with a huge tax liability. Aggrieved by such order, the Board filed a writ petition before the High Court of Kerala.

High Court Held

The Court held that notwithstanding the nature of services being carried out by the Petitioner, the GST Act does not provide any exemption or a “zero rated tax” for the products of the Petitioner. In such circumstances, the claim for exemption based on the earlier statutes cannot have any legal basis. Further, there cannot be any estoppel against a statute. Since concededly, the taxing provisions of the GST Act are applicable to the Petitioner, the contentions based on the earlier statutes have no bearing.