The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activity of Hair Transplant is cosmetic surgery and shall be liable to the service tax levy under the provisions of the Finance Act, 1994.
A two-Member Tribunal comprising Mr. Ramesh Nair, Member (Judicial) and Mr. C.L. Mahar, Member (Technical) was considering an appeal by Dr. Sanjiv Arunchandra Vasa, a medical practitioner doing ‘Hair Transplantation’ work and was registered during the period under consideration as a Service Provider under the Category – ‘COSMETIC AND PLASTIC SURGERY SERVICES’.
Subsequently, the appellant sought for a refund vide letter dated 25.04.2011 through their counsel contending that their services “Hair Transplantation” were not taxable.
The CESTAT noted that the Hair Transplant is neither undertaken to restore or reconstruct anatomy or its functions, nor the procedure of hair transplant restores developmental abnormalities degenerative diseases, injury or trauma.
“We find that hair transplant is a medical procedure to improve outer look of the body for time being and it does in any way contributes to the anatomy or functions of the human body,” the CESTAT observed.
Rejecting the plea of the appellant, the CESTAT further observed that “the medical procedure undertaken by the appellant is a process which is not opted by every person affected with hair loss, it is only a few affluent or self physical appearance conscious persons who undertake such surgery, the other persons affected by hair loss also live a normal life without any „sub-normal‟ condition as claimed by learned Chartered Accountant. It is also normally seen that the Hospitals that undertake the procedure of Hair Transplantation advertise/ display their activity not as a disease to be cured but as they claim that the procedure taken by them enhances physical appearance. So in our view, only diseases such as „Congenital atrichia‟ or „hypotrichosis‟ which are unique conditions of hair loss which exhibit at birth or early stages during childhood could only be considered congenital defects for the purpose of the exemption.”
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