Special Correspondent

Probe reveals luxury and sales tax are not being remitted

  • Tax on room tariff and food items reportedly being evaded
  • Amount due from various hospitals is Rs. 1 lakh to more than Rs. 2 crores

    HYDERABAD: What is common between some leading corporate hospitals and prestigious clubs? Both have been found to have evaded payment of luxury and sales tax on room tariff and food items during the past few years.

    Room tariff of Rs.500 and above in corporate hospitals attracts a 10 per cent luxury tax, while the sale of medicines and food served is liable for sales tax.

    According to official sources, investigations by the Vigilance and Enforcement Department showed that some hospitals adopted practices "either at reducing or evading tax liability."

    The sleuths found that the room tariff was shown to be less than the taxable threshold, by including nursing and other miscellaneous services.


    Records of corporate hospitals in Hyderabad and Vijayawada also revealed that sales tax was not remitted on medicines, disposables and food items. The tax amount, which was due from different hospitals for 2004-05 to 2006-07 ranged from Rs.1 lakh to more than Rs.2 crores.


    A few prestigious clubs in Hyderabad, the investigators found, were "overcharging customers" and the excess tax amount was not being paid to the Government.