Tuesday, January 24, 2017

Hospitals have to pay luxury tax



High Court of Kerala: While deciding the legality and validity of the amendments brought into the Kerala Tax on Luxuries Act, 1976, making it mandatory that every hospital having not less than five rooms for accommodation of patients and which charges Rs. 1000 or more per room to be registered under the Act and the ‘luxury’ provided in such hospitals, excluding the charges for medicine, food and professional services, would become exigible to luxury tax under Entry 62 List II of Schedule  VII of the Constitution


The Court also stated that the competence of the State Legislature to enact on the matter of ‘luxuries’ is, incontestable since Article 246 of the Constitution grants exclusive power to make laws with respect to any of the matters enumerated in List II to the State Legislature hence, the amendments made by the State Legislature were intra vires the constitutional provisions. [Rajah Healthy Acres (P) Ltd.  v. State of Kerala, 2016 SCC OnLine Ker 29534, decided on 9-12-2016]

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