Decided 8 October 2026. The Kerala High Court has held that the holder of a Travancore Devaswom Board tender to collect fees from Chendamelam artists could not charge Rs 9 GST on top of the fixed Rs 50 fee, because the tender schedule made the fee inclusive of all taxes. The Court drew a clear line between the statutory liability to pay GST and the contractual right to recover it from the recipient.
Case at a glance
| Case | V.P. Sugathan v. Travancore Devaswom Board & Ors. |
| Forum | Kerala High Court (Justice Raja Vijayaraghavan V. and Justice K.V. Jayakumar) |
| Case No. | WP(C) No. 42585 of 2024 |
| Date of judgment | 8 October 2026 |
| Tender amount | Rs 46,68,117 plus GST of Rs 8,40,261 paid upfront |
| Result | Writ dismissed |
Facts of the case
The petitioner won the tender (Kuthaka item B1) to collect Rs 50 per performance from Chendamelam artists at the Erumeli Pettathullal for the Mandalam-Makaravilakku season. Under clause 23 of the tender, he paid 18% GST on the tender amount upfront.
He began collecting Rs 59 (Rs 50 plus Rs 9 GST). After complaints, a notice dated 18.11.2024 said the fee of Rs 50 was inclusive of GST. He sought permission to collect Rs 50 plus 18% and reimbursement of tax not collected.
Issue before the High Court
Does a supplier's statutory liability to pay GST give it a right to collect GST from recipients over and above a fixed, tax-inclusive fee?
What the High Court held
- The liability of a supplier to pay GST and its right to pass on the burden are distinct. The liability is statutory; recovery from the recipient depends on the contract.
- As the CGST department noted, parties may agree on tax-inclusive or tax-exclusive pricing; for inclusive pricing, tax is worked out under Rule 35.
- The petitioner's right to collect fees came only from the tender, which fixed Rs 50 per performance inclusive of all taxes. Nothing in the tender allowed an extra GST charge.
- There was no statutory or contractual basis for the Devaswom to reimburse the GST. The writ was dismissed.
Practical takeaways for taxpayers
- Before bidding for a tender or concession, check whether the user charges are inclusive or exclusive of GST.
- Where a price is tax-inclusive, compute GST by back-calculation under Rule 35 and factor it into your bid.
- Contractual price terms decide whether GST can be added; the GST law does not by itself give a right to recover tax.
Frequently asked questions
Can a supplier always add GST to the agreed price?
No. The Kerala High Court held that the right to recover GST from the recipient depends on the contract terms.
How is GST worked out on a tax-inclusive price?
Under Rule 35, by extracting the tax from the inclusive value.
Facing a similar GST dispute?
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This summary is based on the order of the Kerala High Court in WP(C) No. 42585 of 2024. It is general information, not legal advice; the outcome of any case depends on its own facts and the full text of the order.