This site is intended for Healthcare professionals only.

Luxury Tax on Hospital rooms charging more than Rs 1000 per day: Kerala HC Decision

Luxury Tax on Hospital rooms charging more than Rs 1000 per day: Kerala HC Decision
Kerala: Hospital rooms costing over Rs 1000 per day are soon going to attract luxury taxes. Kerala High court was recently seem upholding the said decision of the state government,thus sealing the fate for most of healthcare facilities as majority hospitals in the state have room charges exceeding Rs 1000 per day. The judgement has come against an appeal filed by  Rajah Healthy Acres Pvt Ltd, which operates a hospital in Kochi. The appeal challenged the state government's decision to levy luxury tax on hospital rooms that cost more than Rs 1,000 per day. The state government had incorporated amendments in the Kerala Tax on Luxuries Act, 1976 making it mandatory for hospital having not less than five rooms for accommodation of patients and which charge Rs 1,000 and above per room, excluding the charges for medicine, food and professional services, to be eligible to pay luxury tax The impugned amendments to the Act define luxury provided in a hospital under Section 2(fb) as “accommodation for residence for use of amenities and services provided in a hospital, the rate of charges of which, excluding charges of food, medicine and professional services, is one thousand rupees per day or more'' The appeal had contended that Rs 1,000 is very meagre and would not qualify as a luxury given the nature of work at hospitals and thus this decision should be struck down. However, the court dismissing the appeal pointed out that it cannot interfere with the limit set by the legislature which is based on the relevant social and economic parameters of the people of the state. Explaining the concept of luxury the court was found stating
"The term luxury has been defined to exclude all the essential components of healing and care given by the hospital and includes only that which is not essential to such therapeutic care or healing. The legislature obviously thought that such accommodation and amenities beyond the pecuniary limit of Rupees one thousand can be classified as luxury and it is not something that the courts can interfere with merely because the perception which it holds, even it does, that such pecuniary limits are too low in order to classify as a luxury. We have to be aware of the fact that the legislature legislates for all the people of the State. It is intended to cater to all the classes in the socio-economic and cultural categories of people and it should be presumed that such legislation has been made taking into account all the relevant criterion including the economic one so as to cater not to a particular class but the entire citizenry. Legislation stems from the experience of the evils and should not, therefore, be impeded by the particular beliefs or opinion that certain classes of people would hold. The wisdom of legislature has to be respected as being for the good of the citizenry at large and not to the sentiments of a few."
With the said judgement, in the state of Kerala, in respect of a hospital, for charges of accommodation for residence for use of amenities and services, tax will be levied at the rate of ten percent per room where the gross charges, excluding charges of food, medicine and professional services, is one thousand rupees per day or more as mandated by the legislature. You can read the full judgement below  

Source: self
5 comment(s) on Luxury Tax on Hospital rooms charging more than Rs 1000 per day: Kerala HC Decision

Share your Opinion Disclaimer

Sort by: Newest | Oldest | Most Voted
  1. user
    Dr GIRDHAR GYANI January 9, 2017, 10:55 am

    The electricity charges alone in a NABH accredited hospital range from 700-900 per day per bed and this amount is charged by government. How come 1000/ per day become luxury. Some time back government had proposed TAX on centrally AC hospitals, citing this as luxury. After it was represented that AC was required to control infection, it was withdrawn. I can only say that we have not represented correctly in the court


  3. Even tax for suffering becomes a new reality on the people who are helpless but the cost of many who enjoy the nation without doing anything and being a politician

  4. Please please let indian constuition, law and courts come out of 1945 or 1976 time.
    Let them get update with timr inflation and status of people middile class. How ever politcians dont pay money lol. Offcourse poor cant pay money. Rich people doesnt matter wats cost. How about middile class. Let court should update with consence .

  5. Is it luxury or comfort of sick and ill patient that we r addressing. They are not coming to hospital for enjoyment or merriment but just come when they are unwell and want to be comfortable.
    In a comfortable room recovery is better and helps in the recovery of a patient.
    Who is to pay this luxury tax?
    Patient or the hospital?