Service Tax Applicability on Medical Equipment Rent

[Arun Kumar Singh]

Dear Experts,

Please kindly clarify whether Service Tax is applicable on Medical Equipment Rent i.e. Medical Equipment provided on rent to patient at their home on Monthly rent basis without transferring any right of ownership.

Also please note

This shall come under Negative list as renting of equipment with or without without transferring right - Business of leasing out equipment [Ref :-sub-section (zzzzj) of Section 65(105) of the Finance Act, 1994 -] shall not attract service Tax.

 

Kindly clarify based upon your understanding and expertise, I shall be grateful for your such kindness a ref may be made INOX AIR PRODUCTS LTD. Versus UNION OF INDIA - 2014 (9) TMI 459 - GUJARAT HIGH COURT.

[KASTURI SETHI]

Gujarat High Court judgement pertains to the period prior to 31.3.2012. Hence no doubt about taxability before 31.3.12. . Moreover, at present your service is neither in Negative List nor in the Mega Exemption Notification No.25/12-ST dated 20.6.2012 (effective from 1.7.2012) as amended. Prior to 1.7.2012 it attracted ST under the category of "Right to use of Tangible Goods" and after 1.7.2012 under the category, "Other Than Negative List". Therefore, your service is chargeable to Service Tax whether prior to 1.7.12 or after 1.7.2012.

AI Summary

Service Tax Applies to Renting Medical Equipment Post-July 2012, Exemption Not Covered by Mega Notification /12-ST. A query was raised about the applicability of Service Tax on renting medical equipment to patients at home without transferring ownership. The discussion referenced the Negative List under sub-section (zzzzj) of Section 65(105) of the Finance Act, 1994, which exempts certain equipment rentals from Service Tax. However, a response clarified that the Gujarat High Court judgment applied to a period before March 31, 2012, and that post-July 1, 2012, the service is taxable under 'Other Than Negative List' as it is not covered by the Mega Exemption Notification No. 25/12-ST.