VAT on health bill still in force

Most private hospitals and clinics are charging patients Value Added Tax, violating a High Court order, since the VAT Act 1991 is still in force.
The National Board of Revenue, which looks after realising VAT from citizens, has not given hospitals, clinics and diagnostic centres any instructions to break the stalemate arising out of the contradiction between the HC order and the VAT act.
NBR's Member (VAT) Mannan Patwary yesterday told The Daily Star, "We are taking steps to appeal in the court against the order since it contradicts VAT Act 1991. We will try to implement the act but the decisions depend on the court."
On July 14, the HC declared imposition of VAT on citizens for providing health services illegal.
The HC had also declared illegal and unconstitutional the provisions of VAT Act 1991 for realising VAT from patients for making any prescription or conducting pathological tests.
Lawyers said the HC verdict established people's fundamental right to life guaranteed by the constitution.
Supreme Court lawyer advocate Manzill Murshid along with two other lawyers had filed the public interest litigation petition with the HC against charging citizens VAT for taking healthcare services.
Health centres found still realising VAT in a confidential investigation by the petitioners include Ibne Sina, Popular Diagnostic, Modern Diagnostic, Square Hospital, United Hospital, Medinova, Shomorita Hospital, Monowara Hospital, Labaid Hospital, Central Hospital, Delta Hospital, Apollo Hospital, Brighton Hospital, Comfort Diagnostic, Compath Ltd and City Hospital.
Manzill Murshid told The Daily Star, "We have sent legal notices to hospitals charging patients VAT, which constitutes contempt of court."
He said they requested the authorities of these hospitals, clinics and diagnostic centres to stop realising VAT from patients within three days of receiving the notice circulated on Sunday, otherwise the lawyers might file contempt of court cases against them.
Owners of a few hospitals, however, claimed that they did not commit contempt of court because they did not receive any government order for not collecting VAT.
"We have written to the National Board of Revenue about the court's directive and sought its guidance regarding what to do. But we have not got any answer yet," said Dr Moniruzzaman Bhuiyan, president of Bangladesh Private Clinic and Diagnostic Owners' Association.
"Unless we receive any government order, we have to follow the NBR's rules...Without instructions from the NBR, we cannot stop charging patients VAT," he said.
Director (medical services) of Square Hospital Ltd, Prof Sanowar Hossain yesterday declined to make any comment, asking this correspondent to contact the hospitals' business department for information on the matter.
Executive Director of Brighton Hospital Sohel Rana said, "NBR officials still visit health institutions to check whether VAT is being collected or not...They visited our hospital and asked us to collect VAT, saying otherwise the hospital will be shut down."
On February 15, the HC had issued a rule upon the government asking it to explain why the rules of VAT Act 1991 to realise VAT from citizens against health services should not be declared illegal.