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High Court dismisses KMC, Manipal’s petition seeking customs duty exemption

High Court dismisses KMC, Manipal’s petition seeking customs duty exemption

Mangalore Today News Network

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.


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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 In fact the circular had been withdrawn by the Centre later on.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.

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