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Revenue from operations

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Easwaran S

4 Points Posted on 14 September 2020

Dear All,

We have small Clinic along with Pharmacy.

This is regarding the Financial year 15-16. the TAX was VAT for sales and purchase of drugs. We have paid all the necessary VAT as may be applicable.

My query is sales of drugs should it be under sales of good or sales of services in revenue from operation during the filling of TAX.

our auditor as put it under sales of Services and now there is query from VAT department for the finance year 15-16. As for my knowledge goes the revenue from sales of drugs should be under sales of goods, I don't know I may be right or wrong. Please clarify.

Regards,

Eash

Replies (3)

Quick Summary

A clinic and pharmacy owner is seeking clarification on whether sales of drugs should be classified under 'sales of goods' or 'sales of services' for revenue from operations in their tax filings. Their auditor incorrectly classified it as services, leading to a query from the VAT department. The consensus is that drug sales are definitively 'sales of goods', and advice is given on filing revised VAT returns and consulting a CA to rectify the error.