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The Full Bench of Kerala High Court comprising of Justices Ashok Menon, K.Vinod Chandran and A. Muhamed Mustaque has stated jointly that materials used in during operation, medicines and implants are no more taxable as don’t come under the ambit of sale of goods.
There was a bunch of writs and revision petitions herd by court leading to the question that whether consumables, medicines and surgical tools used in medical procedures these come under Article 366(39A)(f) of Constitution of India and Kerala VAT act, 2003.
These medicines and other materials actually come under service of hospital only as these hospitals usually have pharmacies of their own. However, the reference was made to full bench as the opinion is totally conflicting in other decisions by coordinate benches of the court.
The court first agreed with the decision of division bench where it stated that food or any consumable items which are supplied for service come under Article 366(29A)(f) which includes within sale of goods. It then later clarified that though clause (f) states “any other article for human consumption” these doesn’t come under this ambit.
The court clarified that it comes within the transaction of the treatment which is service rendered to the patient and it added that even though the hospital and patient has no contract element of sale is an integral part of medical service which cannot be plucked away from the transaction making it levy from the sales tax.
The court further has also noted that High Courts of Jharkhand, Allahabad, Punjab and Haryana has also given their decision in consonance with its findings and the full bench has directed the Registry to place the matter for considering the individual decisions before the division bench.
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