VSS asked to cough up 1.97cr tax

The income tax department has asked  VSS medical college hospital to pay up Rs 1.97 crore as income tax for collecting fees from patients.

The medical authority collects small amounts from patients in the name of users’ fee since 1997. The money is used to improve facilities available at the hospital.

“We have received a letter from the income tax department to pay an income tax of Rs 1.97 crore for collecting users’ fees. But users’ fee is not exactly an income of the hospital for which one has to pay a tax. So we have appealed in court to ask the I-T department to review the matter,” principal S K Behera, said on Sunday.

Sources said the government constituted a ‘Swastha Seva Samiti’ for the welfare of VSS Medical College and Hospital, under the chairmanship of the RDC, for which a small amount is collected in the name of users’ fee from patients coming to the hospital. The fund is spent for the development of the hospital and other welfare measures after it is duly approved in the samiti meeting.

Sources said users’ fee generates an amount of Rs 25-30 lakh every month. The college spends Rs 12 lakh of this money per month, of which Rs 5.9 lakh is spent on security measures, Rs 2.4 lakh on laundry and Rs 3.7 lakh on sanitation. Though the money should be spent only on welfare measures, the hospital authority is violating the rule by purchasing machines and equipment from the fund, sources said. Since a lion’s share is spent on various activities each month, the hospital does not have sufficient amount to meet the income tax demand, sources added.

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