Medical device makers seek TDS exemption on free medical samples given to doctors

Medical Technology Association of India (MTaI) has also urged the government not to consider the expenses incurred on doctors' 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 mobilising medical devices and equipment.

Thus, TDS should not be levied on such expenses, the industry body stated. 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 profession to keep a check on tax revenue leakage.

The Central Board of Direct Taxes (CBDT) recently on June 16, 2022, published guidelines to enable effective implementation of the provision from July 1, 2022, which has created concerns in the industry, MTaI said.

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.

''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,'' MTaI Chairman & Director General Pavan Choudary said.

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, he added.