Telangana High Court to hear on tax exemption of surrogacy process

A two-judge bench of the Telangana High Court examined the aspect as to whether fertility clinics can withhold tax from payments provided to surrogate mothers at the point of origin

Hyderabad: A two-judge bench of the Telangana High Court comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji on Tuesday examined the aspect as to whether fertility clinics can withhold tax from payments provided to surrogate mothers at the point of origin.

The intriguing human issue came up before the court from a taxman perspective. Kiran Infertility Centre moved the High Court in a writ plea challenging the charge made against it by the assessing authority.

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The petitioner contended that commercial surrogacy was forbidden under the Surrogacy (Regulation) Act and argued that it cannot be treated as a business for imposing tax. On the other hand the assessing authority and Tribunal took a contrary view.

Observing that surrogacy was a tri-party agreement between the hospital, the parents, and the surrogate mother, the bench expressed it would hear the question of how the surrogacy process may be exempted from Tax by examining the Surrogacy Act.

It directed both parties to submit their detailed submissions on the next date of hearing and adjourned the case to July 24.

Notice to Tamil Nadu Mercantile Bank

In a separate case, the two-judge bench of the Telangana High Court comprising Chief Justice Ujjal Bhuyan and Justice N Tukaramji on Tuesday issued a notice to the Tamil Nadu Mercantile Bank Ltd in a contempt case filed by one Sunil Kumar Agarwal.

The petitioner complained that in violation of the High Court order, the bank has issued a possession notice.

The bank initiated proceedings against the petitioner under the SARFAESI Act for recover of the loan amount. The petitioner had challenged the proceedings before the Debt Recovery Tribunal, Hyderabad.

However, as there was no presiding officer in the Tribunal, the petitioner moved the High Court and obtained an order against the bank restraining it from proceeding with the possession and further steps.

On Tuesday observing that the bank has proceeded with recovery proceedings against the court order, the bench issued notice to the bank for its response and adjourned the case to July 21.