The government has challenged a Civil Court decision at the High Court, which mandates the government to settle Goods and Services Tax (GST) dues related to the Dharumavantha Hospital project. 

The appeal, lodged by the Attorney General’s Office last week, contests the earlier verdict favouring Chang Hua Construction, the Chinese firm responsible for the hospital’s construction.

Initiated under the administration of former President Abdulla Yameen Abdul Gayoom, the 25-storey hospital project, valued at USD 140 million (MVR 2.1 billion), was contracted to Chang Hua. The company later argued in the Civil Court that the Maldives government should bear the GST payments due to the Maldivian state, a claim the court upheld in March.

The ruling specified that the project agreement, adjusted in 2018, did not account for GST in the USD 140 million project cost. Consequently, the court directed the Maldives government to pay the GST liabilities incurred by Chang Hua and reimburse MVR 227,000 the company had already paid to the Maldives Inland Revenue Authority (MIRA).

The High Court has not yet decided whether to accept the appeal, which could have significant implications for the financial responsibilities associated with major development projects in the country.