Memorandum submitted before the Finance Minister

Sub: Exemption for health-care institutions from VAT – regarding

Kindly consider -- A hospital service is not susceptible to be split into treatment as service and giving medicines as sales.

We hereby invite your kind attention to the matter in Kerala General Sales Tax Act (K.G.S.T. Act) enacted as 15 of 1963. At the time of enactment or after two decades, did neither the State Government nor the officials under the Act define Hospitals as a dealer under the Act? In the year 1998 some of the officials under the Act started to define and consider Hospitals as business centres as well as shops and issued notices to Hospitals to register and bring them under the purview of the Act. In the light of the said event, we were forced to approach the Hon’ble Court for justice, filed cases in the matter, and finally filed Special Leave Petition No. 2118/06 before the Hon’ble Supreme Court. The Hon’ble Supreme Court was pleased to “Grant Leave” in the said matter. By virtue of the said order the Sales Tax Officers and the department were constrained to keep the matter pending and desist from all the proceedings against Hospitals under the Act.

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