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2022 (9) TMI 60 - HC - VAT and Sales TaxLevy VAT - health care services - supply / sale of goods to patients - implants, surgical items and medicines sold by the respondents - sale or service - whether the same was falling within the ambit of definition of "sale" as defined under Section 2(35) of the RVAT Act, 2003 or not? - test of predominance - HELD THAT:- If the transaction in question is a service, then by no stretch of imagination, the petitioner-Revenue will have power to collect sales tax/VAT on the same. If the transaction in question amounts to sale, the power will be wholly exercised by the petitioner-Revenue as the same will be under their domain. In the case in hand, the respondents are running health care services wherein the patients are categorized primarily in two categories; out patients and "in-patients" for administrative convenience. The out patients are those who visit a hospital for routine check ups or clinical visits. In-patients are those who are admitted in the hospital for the required treatment. Normally, there is a central pharmacy from where the procured stock of medicines, implants, consumables etc. are supplied to its outlets such as; in-patient pharmacy, operation theater pharmacy and out-patient pharmacy. The in-patient pharmacy and operation theaters pharmacy supplies medicines and consumables only to in-patients - the medicines, implants, room provided on rent used in the course of providing health care services/medical treatment to the patients admitted for diagnosis for treatment in the hospital or clinical establishment are undoubtedly naturally bundled in the main services of medical treatment and it is a composite supply to facilitate health care services. The case in hand pertains to rendering of health care/medical services and not supply of goods, this Court is of the view that the value recovered by the hospitals towards the cost of medicines, implants, stents, lenses and various other charges towards room rent, supply of food cannot be classifiable as sale or supply of goods but the transaction will be of service on account of Predominant Test/ Aspect Doctrine - the substantial question of law formulated and arising out of the order impugned passed by the learned Tax Board is decided in favour of the respondents-assessees and against the petitioner-Revenue. Sales Tax Revision Petitions are dismissed.
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