SUPPLY OF REAGENT

[NILESH PITALE]

Respected Experts advisor

F Y 2013.2014 service tax Issue

Question & Fact : My Client was Giving Medical Devices to the Hospitals ( Private & Governments) on Rental Basis and to run the same devices my client was Supplying them Reagent & Consumable under term & Condition of the agreement, for that he was charging VAT there on , The Consideration was fixed for the said supplied per Month.Now the question is whether Service tax is applicable on It or not ?

Bill Description is ti

• Rental Reagent Agreement for cobas121 contract Period : 1.4.13 to 30.4.13 ₹ 35000 + 12.5% vat

Please guide us.

[KASTURI SETHI]

Dear Sh.Pitale,

Correct and fool-proof reply is not possible without going into the terms and conditions of the agreement executed. Clauses of agreement are ultra crucial in this scenario. However, the following decision of AAR , New Delhi will be very helpful to you in arriving at correct decision.:-

2016 (42) S.T.R. 592 (A.A.R.)= 2016 (1) TMI 1066 - AUTHORITY FOR ADVANCE RULINGSIN RE : SICPA INDIA PVT. LTD.

[KASTURI SETHI]

Ultra crucial decision of AAR Kerala and upheld by AAAR, Kerala on 13.5.19. 2019/103.taxmann.com 159 =2019 (3) TMI 833 - APPELLATE AUTHORITY FOR ADVANCE RULING, KERALA

2018 (18) G.S.T.L. 109 (A.A.R. - GST) = 2018 (10) TMI 598 - AUTHORITY FOR ADVANCE RULINGS, KERALAIN RE : ABBOTT HEALTHCARE PVT. LTD.

AI Summary

Service tax applicability on reagent supplies under rental medical device agreements depends on contractual terms and precedent. Whether service tax applies to reagents supplied under medical device rental agreements depends on the contractual characterisation of those supplies; factual presentation shows devices rented to hospitals with reagents billed separately with VAT for a fixed monthly consideration. Analysis must focus on agreement clauses to decide if reagents are supplies of goods or composite/ancillary services, and advance-ruling precedents on similar arrangements are relevant to that classification.