GST on Sale of Machinery where ITC has not been availed

[Pradeep Singhi]

Sir,

A Private Ltd. Co. running a hospital purchased a machinery in GST regime & ITC was not availed on the same as output service (Healthcare service) is exempted.

Now, the machinery is sold by the Hospital to another Hospital (a Partnership Firm).

1. Whether GST is payable by the hospital while selling the Machinery?

2. If payable, then since the ITC was not taken earlier & hospital purchasing the machinery is also not eligible to avail ITC, whether it will tentamount to double taxation on these type of transactions?

3. Any case laws related to this type of transactions?

AI Summary

Private Hospital Must Pay GST on Machinery Sale Despite ITC Ineligibility, Raising Double Taxation Concerns A private hospital sold machinery to another hospital without availing Input Tax Credit (ITC) since healthcare services are exempt from GST. The main question was whether GST should be paid on this sale. Respondents agreed that GST is payable on the transaction value, regardless of ITC eligibility. Concerns about double taxation were raised, as the machinery was initially purchased without ITC and sold without ITC eligibility for the buyer. It was noted that double taxation contradicts GST's objectives, but GST still applies to such transactions. The discussion highlighted the complexity of GST in exempt sectors.