The definition of “works contract” can include hospital/health/Medical services involving composite contracts where there is not only a provision of service but also supply of goods along with such service. The respondents are therefore justified in proposing a demand to tax the petitioner on sale of the stents, valves, medicines, x-ray and other goods used while treating their in house patients.
Section 2(43) of the TNVAT Act, 2006 — Works Contract- Implants implanted in the body of the patients by Hospitals– The petitioners, are corporate bodies and persons running hospitals and are providing expensive Medical/Health services to their inpatients. During their services, they have implanted implants in the body of the patients for treatment by surgery and provided such other ancillary services such as MRI Scan Films, X-Ray Films and others. This has been proposed to be taxed as “works contract” by the respondent within a meaning of Section 2(43) of the Act to propose tax. The petitioners have challenged the impugned notices under Section 27 of the Act to reopen the completed assessment made. The petitioners claimed that they do not charge any amount separately towards the cost of these items and charge a consolidated amount from the patients towards cost of medical treatments. The respondent department submitted that there is a “sale” within the extended meaning of the definition of “sale” under Section 2(33) read with 2(43) of the Act. The court observed that there is not only transfer of possession of prosthetics into the physiology of the patient but also the ownership of such prosthetics to the patient for consideration in the course of the provision of medical/health service. Similarly, in the course of taking x-ray, scan, MRI/CT Scan for such in-patient, cost of which get included into the package are taxable as such activity can be termed as the processing of moveable property.
Held that:- The Hon’ble High Court directed the petitioners to file their respective replies within two months and shall co-operate with the respondent assessing officer.The respondent shall exclude the value of medicine and other consultation charges while determining the taxable value. The demand shall be confirmed to the value of prosthetics and charges incurred towards X-ray, C.T.Scan, PET Scan etc.
The definition of “works contract” can include hospital/health/Medical services involving composite contracts where there is not only a provision of service but also supply of goods along with such service. The respondents are therefore justified in proposing a demand to tax the petitioner on sale of the stents, valves, medicines, x-ray and other goods used while treating their in house patients.
Section 2(43) of the TNVAT Act, 2006 — Works Contract- Implants implanted in the body of the patients by Hospitals– The petitioners, are corporate bodies and persons running hospitals and are providing expensive Medical/Health services to their inpatients. During their services, they have implanted implants in the body of the patients for treatment by surgery and provided such other ancillary services such as MRI Scan Films, X-Ray Films and others. This has been proposed to be taxed as “works contract” by the respondent within a meaning of Section 2(43) of the Act to propose tax. The petitioners have challenged the impugned notices under Section 27 of the Act to reopen the completed assessment made. The petitioners claimed that they do not charge any amount separately towards the cost of these items and charge a consolidated amount from the patients towards cost of medical treatments. The respondent department submitted that there is a “sale” within the extended meaning of the definition of “sale” under Section 2(33) read with 2(43) of the Act. The court observed that there is not only transfer of possession of prosthetics into the physiology of the patient but also the ownership of such prosthetics to the patient for consideration in the course of the provision of medical/health service. Similarly, in the course of taking x-ray, scan, MRI/CT Scan for such in-patient, cost of which get included into the package are taxable as such activity can be termed as the processing of moveable property.
Held that:- The Hon’ble High Court directed the petitioners to file their respective replies within two months and shall co-operate with the respondent assessing officer.The respondent shall exclude the value of medicine and other consultation charges while determining the taxable value. The demand shall be confirmed to the value of prosthetics and charges incurred towards X-ray, C.T.Scan, PET Scan etc.