EXEMPTION TO SALE OF MEDICINES BY A SEC.12A REGD. TRUST

[Padmanathan KV]

A CHARITABLE TRUST REGD U/S 12A OF THE IT ACT IS RUNNING A HOSPITAL. THE SERVICES ARE RENDERED AT NO PROFIT NO LOSS BASIS. A PHARMACY IS ALSO RUN BY THE TRUST INSIDE THE HOSPITAL AND SALES ARE TO PATIENTS TO WHOM PRESCRIPTION IS GIVEN BY THE HOSPITAL DOCTOR.OUTSIDERS DO NOT PATRONISE THE PHARMACY, THE OUTWARD SUPPLY OF MEDICINES BY THE PHARMACY EXCEEDS RS.20 LAKHS.

CAN THE TRUST CLAIM EXEMPTION FOR SUPPLY OF MEDICINES ALSO UNDER 'HEALTH CARE SERVICES'?

[ANITA BHADRA]

Sir

No .

Trust can not claim exemption for supply of medicine under health care services.

Notification No. 9/2017- Integrated Tax (Rate) dated 28.06.2017 has exempted health care services vide entry no 77 which includes any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment,

Sale of Medicines is Taxable:

[DR.MARIAPPAN GOVINDARAJAN]

It is taxable.

[Ganeshan Kalyani]

In my view it is exempt.

AI Summary

Charitable Trust Questions Tax Exemption for In-Hospital Pharmacy Sales Under Health Care Services; Mixed Opinions on Applicability A charitable trust registered under Section 12A of the Income Tax Act operates a hospital and an in-house pharmacy, selling medicines to patients with prescriptions from hospital doctors. The trust inquires whether it can claim an exemption for the sale of medicines under 'health care services' since the pharmacy's sales exceed Rs. 20 lakhs. Responses indicate differing views: one states that the sale of medicines is taxable and not exempt under health care services, while another suggests it could be exempt. The exemption discussion references Notification No. 9/2017-Integrated Tax (Rate).