There is no supply when hospital uses some goods during operation :
In International Hospital P Ltd. v. State of Uttar Pradesh (2014) 47 GST 335 = 48 159 = 71 VST 139 (All HC DB), hospital was using stents and valves during heart operation. The amount for such stent and valve was shown separately in invoice, It was held that it is intrinsic and integral element in performance of heart procedure. It is not ‘works contract’. The substance of contract is not contract for sale of stent or valve.
However, if hospital sales medicines, sales tax will be payable – reported in Sanjos Parish Hospital v. CTO (2012) 55 VST 208 (Ker HC) and Malankara Orthodox Syrian Church v. STO (2014) 135 STC 224 (Ker HC).