It also asked the CBDT to disallow advertisement and business promotion expenses within the purview of explanation under section 37 of Income Tax Act 1961 to create an additional deterrence against such unethical practices.
The CAG in its report tabled in Parliament today observed that the "referral fees" paid to the doctors by the private hospitals, nursing homes, diagnostic centres for referring patients and payments made on account of "advertisement expenses" by the medical practitioners were allowed, although such expenditure has been held as disallowable and "unethical" as per CBDT's directives and laws of regulatory bodies.