Placement of medical instruments without consideration in hospitals is a Supply of Service

Last updated: 15 June 2021
Quick Summary
The Kerala AAR has ruled that placing medical instruments in hospitals and labs, even without direct payment and transfer of ownership, constitutes a 'supply of services' for GST purposes. This is because the agreement includes a minimum purchase obligation for related items, which is considered valid consideration. The ruling clarifies that granting the right to use goods without transferring title falls under the scope of service supply.

Court :
AAR, Kerala

Brief :
The AAR, Kerala, in Abbott Healthcare Pvt. Ltd. [Advance Ruling No. KER/97/2021 decided on June 07, 2021] held that the placement of specified medical instruments to unrelated customers like hospitals, labs etc., for their use without transfer of ownership and consideration, against an agreement containing minimum purchase obligation to purchase medical instruments for specified period, constitutes a ‘supply of services’.

Citation :
[Advance Ruling No. KER/97/2021 decided on June 07, 2021

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Bimal Jain
Published in GST
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