VAT PAID ON DRUGS PURCHASED BUT NOT CLAIMED IN SALE

[BALAJI ARCHAKAM]

Dear ALL

I have a query.We buy medicines for a hospital and dealer charges vat for the supplied drugs.

Now we use them in the OT and charge the patients the whole procedure as a package which also includes drugs for which vat was paid.

Since we are using the drugs as part of a package , they are not billed separately and we are not able to recover the tax paid.How to recover tax in this case from the patient for which the drugs are used?

Is it legal to charge as a package ?

We are also not able to recover tax when we charge everything as a package

kindly advise

Regards

BALAJI

AI Summary

Hospital Seeks VAT Recovery on Drugs in All-Inclusive Packages; Solutions Include Adjusting Pricing and Tax Recognition. A hospital representative inquires about recovering VAT paid on drugs used in operating procedures, which are billed as part of an all-inclusive package rather than separately. This prevents the recovery of the VAT paid on these drugs. Three responses suggest solutions: adding VAT to the package price to avail Input Tax Credit, incorporating VAT into the package itself, and recognizing that the provision of drugs is incidental to the service of treatment, not a standalone sale. The discussion revolves around the legality and practicality of charging VAT within a package deal.