For AMC, MRI unit is a computer

AHMEDABAD: Twenty-three years after a Magnetic Resonance Imaging System (MRI unit) was imported to the city by a private radiology centre in 1995, the Ahmedabad Municipal Corporation (AMC) still considers it an electronic computer and not a medical equipment.
For more than two decades, the civic body is contesting a case in courts to justify that its levy of 5% octroi duty on the equipment by treating it as an electronic item was proper. AMC refuses to accept it merely as a medical equipment or hospital requisite and has recently moved Gujarat high court against the order of a civil court which ordered AMC to charge octroi at 2% levied on medical equipment and return remainder tax charged with 6% interest.

According to case details, city-based X-Ray House imported Telso Magnatic Resonance Imaging System (MRI) unit at a price of Rs 3.37 crore in December 1995. AMC levied 5% octroi on the equipment as 'electronic computer' and charged Rs 16.86 lakh. The radiology centre continued to oppose the levy of octroi as electronic computer and requested AMC to charge only 2% octroi.

Civic body approaches high court

This rate is levied on medical equipment and since the MRI unit was for advanced non-invasive medical tests to diagnose medical conditions by producing detailed pictures of organs, soft tissues, bones and virtually all internal body structures.

Since AMC refused to accept MRI unit as a medical equipment and to reduce octroi duty, X-Ray House filed a suit in the city civil court and insisted that AMC can collect 2% octroi duty under the tariff item for surgical instruments, scientific instruments and hospital requisites.

It claimed recovery of the 3% difference with interest from AMC. AMC, on the other hand, continued to maintain that the MRI unit shows live telecast of the internal part of the body of a person on a computer monitors. Hence, it falls under the head of electronic computers and cinematography equipment and liable to be charged with 5% octroi duty.

After the hearing, the civil court in 2016 held that the MRI unit is medical instrument for diagnosis and it is not an electronic computer. Merely because it has a small part of electronic instrument, whole machine cannot be covered under the definition of electronic instrument.

“Nowadays, electronic computer and electronic instrument is used as a one of the part in most of machinery like auto mobiles, musical instruments, cooking instruments etc, but it does not mean that each and every machine, in which computer or electronic instrument is used as a one of the part, can be construed under the definition of the electronic computer,” the court said. The court ordered AMC to charge octroi duty at the rate of 2% on MRI unit, Rs 6,74; and asked it to return Rs 10.11 lakh to the party with 6% interest. AMC has approached Gujarat high court against his order, which admitted its appeal.