Top Stories College Supplying Food through Canteen run by Educational Trust Must Register under KVAT Act: Kerala HC [Read Order] The court held that the liability to pay tax would depend upon the verification ordered to be conducted by the tribunal By Yogitha S. Yogesh – On April 14, 2025 2:05 pm – 2 mins read In a recent case, the Kerala High Court has held that a college supplying food through canteen, though managed by an educational trust, is liable for registration under Kerala Value Added Tax Act ( KVAT ) Act, 2003.
Read More: New ISD Rules Effective April 2025: How Debit and Credit Notes Affect ITC Distribution The assessee/petitioner, Anoor Dental College, is a dental college that is run by the Annoor Educational Trust, an education trust that was created to create and run educational institutions for charitable purposes. The assessee has been subject to proceedings under Section 67(1) of the Kerala Value Added Tax Act, 2003, for failing to register under the Act. The Deputy Commissioner (Appeals) granted the appeal that the assessee had filed. The State filed a case with the Kerala Value Added Tax Appellate Tribunal, arguing that the assessee could not avoid the KVAT Act’s registration obligation because they were providing meals to students through the cafeteria, in protest of the appellate authority’s ruling. Worried About SME IPO Pitfalls? Gain Clarity with This Advanced Course! Register Now
Read More: Capital Gains arising on Mutual Fund Investments of Non Residents not Taxable in India: ITAT The Tribunal came to the conclusion that, even if mess fees cannot be regarded as sales, if they are, then the exemption is not permitted. As a result, the assessee must register in accordance with Sections 15 read with 6 of the Act. In accordance with Section 25(1) of the Act, the Tribunal ordered the assessing authority to finish the assessment and instructed the assessee to register. The assessee argued that as its principal activity is teaching, any supplementary business it does in support of this vocation cannot be interpreted as a business and, as a result, the assessee will not be considered a “dealer.”
Read More: Top Stories Income Tax, GST Depts Join Forces: Reopening Old I-T Assessments Over GST Invoice Mismatches and Fake ITC Claims The panel disagreed with the assessee, stating that the assessee could not be forced to register even if it were presumed that the canteen’s sales were taxable under the VAT regulations since they fell within the threshold level. According to the court, the KVAT Act’s definitions of “business” and “dealer” are sufficiently broad to encompass all of a person’s actions, aside from those taken in the course of his business, therefore the assessee cannot argue that he will fall outside of them.
The Division Bench comprising of Justices A.K. Jayasankaran Nambiar and Easwaran S observed that “It may be true that the sales across the counter in the canteen may be within the threshold limit, but however that by itself will not enable the assessee to contend that it is not bound to take registration under the provisions of the KVAT Act.” While dismissing the revision petition, the court held that the liability to pay tax would definitely depend upon the verification ordered to be conducted by the tribunal. To Read the full text of the Order CLICK HER