MUMBAI: A private medical institute , admitting its first batch of students this year, has put the state government in a dilemma after it registered as a private limited company. The Vedantaa Institute of Medical Sciences , Palghar, is the first medical college in the state to have registered under the Companies Act, 2013. A letter from the institute addressed to the government last month stated they are allowed to make profits and their fees do not require the Fee Regulation Authority's nod as they are registered as a company . Vedantaa, incidentally , is charging the highest fees (Rs14 lakhyear) among all private colleges in the state.After deliberating over the letter for almost a month, the government, as of now, has decided to not allow the college benefits of reimbursements extended to other private colleges. In a circular issued by Directorate of Medical Education and Research (DMER) on Thursday , the authorities have asked students to change their preferences, if they intend to, after the benefits have been lifted. “Candidates admitted to the said institute will not be entitled for reimbursement of fees as per the state government's decision,“ said DMER director Pravin Shingare.Around 25% seats are reserved for students from socially and economically backward sections in private colleges. The fees of these students are either reimbursed by government fully or 50%, depending on category . If the state reimburses fees, it will have to either pay Rs14 lakh per year for SCST students or Rs7 lakh for students from the OBC category to the college, which is anyway running on a profit basis. But the no-reimbursement policy is applicable to only deemed universities as they do not follow any reservations. The Maharashtra Private and Unaided Professional Educational Institutions (Regulation of Admission and Fees) Act, 2015, allows the state to regulate admissions and fees in private colleges. But there is no provision specifying regulation of private institutes registered as companies. With no precedent, the government is not sure if it should be treated at par with other private institutes or deemed ones. “Since the college is affiliated to Maharashtra University of Health Sciences like other private colleges in the state, we will anyway be presenting the ir case to the Shikshan Shulka Samiti,“ said medical education secretary Sanjay Deshmukh.The Vedantaa Institute is registered as Vedantaa Institutes of Academic Excellence Pvt Ltd with a registered address in Sion (E). The institute's dean, Ganesh Kesari, said he would not like to comment on the issue and that students need to follow instructions given by DMER. An IT official said such institutes will have to comply with regulations under Companies Act and I-T Act and pay taxes on profit generated out of the business.