Mangaluru, Jan 31, 2018 : The Karnataka High Court has dismissed the petitions filed by Kasturba Medical College of Manipal and Manipal University seeking customs duty exemption for import of medical equipment.
Delivering the judgement, High Court Judge Justice Dr Vineeth Kothari stated that the customs duty exemption was impossible as the hospital has failed to furnish with evidence to the government as well as Court that it has offered free medical service to a fixed number of poor patients as is the condition laid down by the Union Government to avail the exemption.
The Court has also taken serious cognizance of the fact that 392 out of the 396 hospitals that have availed concessions in customs duty had openly flouted the conditions laid down for the same.
The Mangaluru Customs Commissioner in a notice served in 2015 had stated that the KMC Manipal has to pay a customs duty of Rs 4.52 crores. However the Hospital, on the basis of an earlier circular,had contended that it was eligible for exemption in Customs Duty towards import of medical equipment. In fact the circular had been withdrawn by the Centre later on.
As per the Central Health Department notification of 1988, hospitals which import medical equipment are given exemption in customs duty provided they offer free medical service to a minimum 40 percent of their out patients and 10% of their in-patients.
In 2011 some medical institutions had moved the High Court against this following which a divisional bench had suggested that an alternate scheme be issued with regard to the conditions. The then Chief Justice Khehar had suggested that instead of the earlier condition of offering free medical service to 40% of the patients, there should be a condition that 20% of patients ought to be provided free service for 20 years from 2012. But neither the petitioners nor the government had filed any affidavit in this regard, the High Court regretted while delivering its order. It has also expressed its concern over the misuse of customs duty exemption facility.