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2022 (12) TMI 360 - AAAR - GSTHealth care institute or Educational institute - Charitable Society, having the main object and factually engaged in imparting Medical Education - taxable supply or not - requirement of registration in view of the provisions of section 23 of the CGST Act - Outward supply/composite supply - cost of Medicines and Consumables recovered from OPD patients along with nominal charges collected for Diagnosing by the pathological investigations - nominal charges received from patients (who is an essential clinical material for education laboratory) towards an Unparallel Health Insurance Scheme to retain their flow at one end for the purpose of imparting medical education as a result to provide them the benefit of concessional rates for investigations and treatment - nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, Refreshment etc. which are support activities for attainment of main activities. Whether the impugned activities by the Appellant wherein they are providing educational services by way of imparting medical education through MGIMS, and providing the health care services through Kasturba Hospital, can be construed as Business in terms of the provisions of CGST Act, 2017? - HELD THAT - On perusal of both the definitions of the term business, it is noticed that the definition of the term business under the erstwhile Bombay Sales Tax Act, 1959, does not include the entries profession and vocation, which are present in the definition of the term -business under the CGST Act, 2017, thereby, rendering much wider meaning and scope to the term business under CGST Act, 2017. Thus, the term business under the CGST Act, 2017 is wide enough to include the activities of the Appellant-Society. Thus, the contention of the Appellant is not tenable. Whether the said activities of educational services and health care services undertaken by the Appellant will be construed as supply in terms of section 7(1)(a) of the CGST Act, 2017, or not? - HELD THAT - As it is an admitted and undisputed fact that the Appellant-Society are providing the education and health care services through its two arms, namely, MGIMS and Kasturba Hospital, respectively. Further, there is also no doubt about the Appellant-Society being a person in term of its definition provided under section 2(84) of the CGST Act, 2017, which inter alia includes the society. Moreover, it is also evident that the said activities are being performed by the Appellant-Society in the course of their business as the said activities comprising imparting of medical education to the students to address the shortage of doctors in rural India, and providing the health care services to the poor rural and urban people are the sole objectives of the Appellant-Society. Thus, it is opined that the activities of the Appellant can be rightly construed as supply in term of section 7(1)(a) of the CGST Act, 2017. As the services of medical education provided by the Appellant-Society is recognized by the Maharashtra University of Health Sciences, Nashik and Nagpur University, MGIMS, an establishment of the Appellant-Society, falls under the category of educational institution as defined under the GST law, and accordingly, it is held that the medical education services provided by the Appellant to the students will attract nil rate of GST as per the aforesaid entry 66, ibid. Since the impugned activities of the Appellant pertaining to imparting of medical education and health care services as discussed hereinabove have been held to be supplies in terms of section 7(1)(a) of the CGST Act, 2017, the said activities would also be considered as outward supply for the Appellant in terms of the provisions of section 2(83) of the CGST Act, 2017. Therefore, the fees. Therefore, the fees and other charges received from students, and recoupment charges received from patients would accordingly constitute consideration for outward supply - it is observed that the core services of the Appellant-Society, viz. provision of medical education to the students and provision of health care services to the patients, are exempted supplies. On careful perusal of the aforesaid definition of the term composite supply and the essential conditions enumerated hereinabove, it is seen that the composite supply comprising two or more supplies of goods or services or both, or any combination thereof should be made by a taxable person to a recipient. However, in the instant case, the main services of the Appellant, i.e., educational services and health care services are provided to the students and patients whereas the services of renting of immovable property are provided to some third party consumers, who run their establishments on their own account on the land made available to them by the Appellant against certain consideration. Thus. It is apparent that these services under consideration are not provided to a single recipient as mandated under the provisions of composite supply under section 2(30) of the CGST Act. 2017, and accordingly, cannot be said to be part of the composite supply. Appellant receive an amount on account of disposal of wastes such as medical equipment, apparatus, and other instruments, etc., by selling them to the interested vendors - HELD THAT - The said activities of the supply of the scrap to the vendors are not being made to the students or the patients. who are the recipients of the exempted supply of educational services or health care services respectively, and therefore, the said supply can aptly be construed as independent and separate supply, attracting the levy of GST thereon at the applicable rate prescribed under Notification No. 01/2017-C.T. (Rate) dated 28.06.2017. The Appellant-Society are rendering exempted services as well as taxable services. Hence, it is concluded that the Appellant-Society are liable to take registration in terms of section 22(1) of the CGST Act, 2017 provided their aggregate turnover exceeds the threshold limit prescribed under the said Act.
Issues Involved:
1. Whether the appellant, a Charitable Society, engaged in imparting Medical Education, is engaged in "business" under the CGST Act, 2017. 2. Whether the appellant is liable for GST registration under Section 22 of the CGST Act, 2017, or can remain outside the purview of registration under Section 23. 3. Taxability of fees and other charges received from students and patients. 4. Taxability of the cost of medicines and consumables recovered from OPD patients. 5. Taxability of nominal charges received from patients under an "Unparallel Health Insurance Scheme." 6. Taxability of nominal amounts received for essential facilities like banking, parking, refreshment, and disposal of waste. Issue-Wise Detailed Analysis: 1. Engagement in "Business": The Appellate Authority examined the definition of "business" under Section 2(17) of the CGST Act, 2017, which includes any trade, commerce, profession, or similar activity, whether for pecuniary benefit or not. The authority concluded that the appellant's activities of imparting medical education and providing health care services fall under "profession" and thus constitute "business" under the GST law. Despite the appellant's charitable status and previous exemption under the Maharashtra VAT regime, the broader definition of "business" under the CGST Act encompasses their activities. 2. Liability for GST Registration: The authority held that since the appellant's activities are considered "business," they are liable for GST registration under Section 22(1) of the CGST Act, 2017, provided their aggregate turnover exceeds the prescribed threshold. The appellant's contention that their activities do not constitute taxable supply was rejected. 3. Taxability of Fees and Charges: The fees and other charges received from students and recoupment charges from patients are considered "outward supply" under Section 2(83) of the CGST Act, 2017. The supply of educational services and health care services, against which these charges are collected, are exempt under entries at SI. No. 66 and SI. No. 74 of Notification No. 12/2017-C.T. (R) dated 28.06.2017. 4. Cost of Medicines and Consumables: The cost of medicines and consumables recovered from OPD patients, along with nominal charges for diagnostic services, are part of a "composite supply" of health care services. These are ancillary to the principal supply of health care services and qualify for exemption under SI. No. 74 of Notification No. 12/2017-C.T. (R) dated 28.06.2017. 5. "Unparallel Health Insurance Scheme": The charges collected under the "Unparallel Health Insurance Scheme" are considered advances towards the provision of health care services. These charges are exempt from GST under SI. No. 74 of Notification No. 12/2017-C.T. (R) dated 28.06.2017. The authority disagreed with the MAAR's classification of these charges under residuary entry at SI. No. 35 of Notification No. 11/2017-C.T. (R) dated 28.06.2017. 6. Essential Facilities and Disposal of Waste: The nominal amounts received for providing space for facilities like banking, parking, and refreshment are considered separate and independent supplies, taxable at 18% under item (iii) of entry at SI. No. 16 of Notification No. 11/2017-C.T. (R) dated 28.06.2017. The charges received for the disposal of waste are also considered independent supplies, attracting GST at the applicable rate under Notification No. 01/2017-C.T. (R) dated 28.06.2017. Conclusion: The Appellate Authority concurred with the MAAR's ruling on questions (i), (ii), and (iii)(b), and modified the ruling on questions (iii)(a), (iii)(c), and (iii)(d) to clarify the taxability of various charges and activities undertaken by the appellant. The appellant is liable for GST registration and compliance, with specific exemptions applicable to their core educational and health care services.
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