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Educational buildings to be exempted from tax: Supreme Court

March 8, 2021

On Monday, March 1, the Supreme Court declared that buildings used for educational purpose should be exempted from house tax.

A two-judge bench (Division Bench) of Justice R.F.Nariman and Justice B.R. Gavai was hearing appeals filed by the State of Kerala against a judgment dated November 22, 2007, pertaining to an exemption provision contained in the Kerala Building Tax Act, 1975. Under Section 3(1)(b) of the Act, buildings used for educational purposes are exempted from building tax. 

The appeals were passed by a Division Bench of the Kerala High Court and Anr v. Mother Superior Adoration Convent and a Full Bench judgment in State of Kerala and Ors v. Unity Hospital (P) Ltd.

Regarding hostel accommodations attached to various educational institutions, buildings owned by educational institutions for providing hostel accommodation to students qualify for building tax exemption under clause (b) of Section 3(1) of the Act.

However, it clarifies, “buildings provided to students like lodge buildings owned by private agencies that rent housing facilities to students will not be exempted. In other words, only hostel buildings owned by educational institutions for accommodating its own students in such hostels will qualify for exemption under clause (b) of Section 3(1) the Act.”

Meanwhile, the Medical Council of India and Nursing Council of India have made it mandatory for every medical college and nursing college to have hostel facilities without which they cannot obtain affiliation from the university. Hence, these have been exempted from the tax.

Also read: Kerala HC: Give 20% discount to parents who pay fees before March 31

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