New Delhi: Medical Technology Association of India (MTaI) has urged the government to reconsider its recently introduced Tax Deducted at Source (TDS) provision on free medical samples provided to doctors. Taxation on these samples will adversely affect hands-on training for doctors and clinicians and therefore impact patients access to life-saving and life-enhancing technologies.
MTaI has also urged the government not to consider the expenses incurred on doctors’ (trainees) travel and stay for product training and application usage as Doctors’ income because they (doctors)are often required to travel mainly due to difficulties in mobilizing medical devices and equipment. Thus, TDS should not be levied on such expenses. MTaI has already written to the concerned authorities highlighting the concerns of the industry.
Introduced in the Finance Act 2022, Section 194R of the Income Tax Act, 1961 regulates the taxability on benefits/perquisites arising to any resident from business or exercise of the profession to keep a check on tax revenue leakage. The Central Board of Direct Taxes (CBDT) recently on June 16th, 2022, published guidelines to enable effective implementation of the provision from July 1st, 2022, which has created concerns in the industry.
As per the provisions, free medical samples provided to doctors, reimbursement of out-of-pocket expenses incurred by healthcare professionals and expenditure pertaining to dealer or customer business conference would be treated as a benefit and therefore be subject to TDS deduction.
Pavan Choudary, Chairman & Director General, Medical Technology Association of India (MTaI), said, “Medical device samples are central to providing hands-on training to doctors and clinicians – in vivo and in-vitro and sometimes to even demonstrate to patients on how the procedure will be carried through. Any taxation on samples will prohibit these activities and hinder the doctor’s ability to deliver an optimal patient outcome which will impact patient’s access to life-saving and life-enhancing technologies.”
“Samples provided to doctors and clinicians are always marked to denote that the unit is meant for physicians only and not for sale as required by the Drugs & Cosmetics Act and Medical Devices Rules 2017”, reasoned Choudary.
