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Supply of medical instrument with other goods to hospitals treated as composite supply: AAR

October 9, 2018[2018] 98 taxmann.com 156 (AAR - KERALA)
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GST : Free medical instrument supplied with other goods to hospitals, for a specific period constitute composite supply liable to GST under Sr. No. 17(iii) - Heading 9973 as transfer of right to use of any goods for any purpose

GST: Placement of specified medical instruments to hospitals, labs, etc. for use without consideration against an agreement containing minimum purchase obligation of products like reagents, calibrators, disposals etc., for a specific period constitute composite supply. The terms and conditions of the agreement reveal that it is an indivisible contract for supply of instrument and products to be used in the instrument and that service or functionality of equipment is available only when components come together. Hence, supply of instrument and reagent is 'naturally bundled' as supply of goods has no independent existence severed from supply of right to use machine/instrument and becomes a 'composite supply', whereby supply of instrument is the 'principal supply'. The entire transaction is liable to GST under Sr. No. 17(iii) - Heading 9973 as 'transfer of right to use of any goods for any purpose'(whether or not for a specified period) for cash, deferred payment or other consideration

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