Private Hospitals Liable To Pay VAT On Supply Of Medicines & Implants To In-Patients: Gujarat High Court

The Gujarat High Court has held that private hospitals must pay Value Added Tax (VAT) on the supply of medicines, implants, professional consumables, and related goods provided to in-patients, ruling that such transfers constitute a "deemed sale."

A Division Bench of Justices Bhargav D. Karia and D. N. Ray observed that after the 46th Constitutional Amendment, the definition of “works contract” under Article 366(29A) of the Constitution was broadened to cover composite transactions including transfer of goods with services

The Court dismissed the petition, stating that the hospitals’ supply of such goods during treatment involves ownership transfer for consideration and is therefore taxable.