Only hospitals treating the poor are entitled to tax breaks, says Madras High Court

Court dismisses petition filed by private hospital seeking tax exemption

The Madras High Court on Wednesday ruled that exemption from payment of property tax, water tax, sewerage charges and the like must be given only to institutions which predominantly serve the poor and not to hospitals which predominantly provide their services to the rich and affluent on collection of hefty amounts of money. The court held that only a hospital which provides free access to the poor and does not deny admission to them could be termed as a charitable institution. Justice S.M. Subramaniam passed the ruling while dismissing two writ petitions filed by Sundaram Medical Foundation, which runs Dr. Rangarajan Memorial Hospital on 2,542 sq m of land allotted to it by the State government at Shanthi Colony in Anna Nagar in April 1992. The present petitions had been filed in 2018 against demand for property tax and other charges by the Greater Chennai Corporation (GCC) and the Chennai Metro Water Supply and Sewerage Board (CMWSSB). The judge said the institution was started with the avowed object of offering services free of cost to the poor and at concessional rates to others. However, now, it had turned into a super speciality hospital and an inspection by the GCC officials found that the hospital was charging equivalent to other private hospitals in the city.