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 applicability on medical equipment rental remains chargeable both before and after regulatory change. Service tax applies to medical equipment rented to patients without transfer of ownership. The service is not covered by the Negative List or the Mega Exemption Notification. Prior to 1 July 2012 it was taxable as Right to Use of Tangible Goods; thereafter it is taxable under the post negative list category, and therefore chargeable.