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Research tag access to tax evasion

Horizon Medicare and Research Institute (not its real name), a premier research and development centre in the city, is yet to publish its first research paper. But over the past three years, it has been successfully evading taxes close to a crore, thanks to the “research institute” tag.

This is just one of the city’s 500-plus small and big hospitals and diagnostic laboratories that have been found dodging the income-tax net and the state government with false claims of being “research institutes”.

While carrying out surprise checks, the state health department recently stumbled upon the fact that most of the so-called research centres scarcely had the infrastructure to conduct research or had any quality article published in an Indian or an international journal.

Armed with sufficient evidence that most private hospitals and nursing homes are offering precious little in terms of research, director of medical education C.R. Maity has announced a crackdown on such centres. “We have decided to ensure that no new hospital or diagnostic laboratory gets the permission to call themselves ‘research institutes’ without adhering to the norms, which include giving specific details about their infrastructure and research plans,” Maity said on Wednesday.

To begin with, the government has asked the city’s 500-odd “research institutes” to hand over details of their research within a month or face action, including possible cancellation of their licences. Surprise checks at the clinics will also be stepped up.

At present, the government gets the bulk of its research material from the state-run hospitals. A lecturer of a state-run medical college, for instance, has to submit at least two quality research papers to ensure a promotion to the rank of a professor.

During inquiries, it was also revealed that most city hospitals, claiming to be research institutes, get a huge tax subsidy under Section 10 (21) of the Income-Tax Act. Officials have also drawn up a list of research centres for the income-tax department. “A special committee of the health department will look into these allegations and recommend necessary action,” said director of health services Prabhakar Chatterjee.

“These institutes show a major portion of their expenditure as part of research and development, which is actually non-existent. They produce fictitious bills and easily get tax exemption from Rs 10 lakh to more than a crore, depending on their stature, every year,” said a committee member. Income-tax officials said they would take action as soon as they got specific complaints from the government.

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