2023 (3) TMI 1318 - AAR - GST

Exemption from GST - Healthcare services - sharing of the charges paid by the patients - contract of taking a space with all amenities related to the Gastroenterological department - whether the consideration to be received by the applicant from the Asian Hospital as to be agreed upon by both parties(the contract is yet to be executed) is eligible for exemption under Sr. No 74 of Notification No 12/2017/CT(R) dated 28 June, 201 7 as amended? HELD THAT - In the case at hand, the Applicant has stated that authorised medical practitioner employed in M/s ARPK Healthcare Provide Ltd. will provide Gastroenterologist services (Healthcare Services) to the patients of M/s Asian. So, M/s Asian will pay to M/s ARPK for the services rendered by it to the patients of M/s Asian Hospital. Both M/s Asian hospital and M/s ARPK healthcare will share the charges paid by the patients. The Recipient of the services is the hospitals/ Clinical establishment i.e. M/s Asian Hospital Pvt. Ltd., who will enter into contract with the applicant. In short, it is said that the Applicant is vested with contract of taking a space with all amenities related to the Gastroenterological department or in other words M/s Asian will enter into a contract with M/s ARPK to outsource the supply of doctors (specialists)/ nurses and other staff. Further, it is also observed that the applicant who is a company will render its specialized services at the premises of M/s Asian hospital Faridabad, who are the recipient of the services, and the applicant will supply the services to consumers/ patients who don't make payment to the applicant. The applicant is paid only by the recipient of the services (M/s Asian). Here it can be said that the services are rendered by one company to another company/ hospital and one of them is supplier and another is recipient of the services. It needs to be seen, what is the legislative intention behind any exemption of tax given under the GST Act i.e. the purpose for not taxing the healthcare services is to give benefit to the common man/patients as it (Healthcare services) is one of the basic necessities of life. Similarly in the field of education i.e. School/College/University tuition fees is exempted whereas the tuition fees charged by the coaching centres institutions is taxable. The authority is of view that the scope of supply under the GST Act is quite vast and covers all aspects of the nature of supplies. And the said supply which is to be made between the applicant and M/s Asian Hospital is duly covered under the definition of the scope of supply, hence taxable under the Act. So, it can be said that the claim of the applicant that the services rendered by the applicant to M/s Asian Hospital is covered under the Notification No. 12/2017- Central Tax (Rate) dated 28th June 2017 is not sustainable rather it falls under the taxable supply of services by a company/ legal entity to an another company/hospital.

Summary

Issues Involved:
1. Eligibility for seeking an advance ruling.
2. Exemption of fee/charges received by M/s ARPK Healthcare from M/s Asian Hospital under GST.
3. Exemption of fee/charges for healthcare services received by M/s Asian Hospital under GST.

Comprehensive, Issue-Wise Detailed Analysis:

1. Eligibility for Seeking an Advance Ruling:
The applicant must satisfy the conditions under the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and Haryana Goods and Services Tax Act, 2017 (HGST Act, 2017). The provisions of both Acts are pari materia. Section 97(2) of the CGST Act, 2017 allows an Advance Ruling on questions about the applicability of a notification, determination of tax liability, registration requirements, and whether an action constitutes a supply of goods or services. The proviso to Section 98(2) states that if the question is pending or decided in any proceedings, the application may be rejected. The applicant confirmed that the issue is neither pending nor decided in any proceedings and paid the applicable fee of Rs. 10,000.

2. Exemption of Fee/Charges Received by M/s ARPK Healthcare from M/s Asian Hospital Under GST:
M/s ARPK Healthcare Private Limited provides healthcare services through authorized medical practitioners to patients of M/s Asian Hospital. The applicant contended that these services are exempt from GST under entry number 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, which exempts healthcare services by a clinical establishment, authorized medical practitioner, or paramedics. However, the authority found that M/s ARPK is not registered as a clinical establishment under the Clinical Establishment (Registration/Regulation) Act, 2010. The supply of services through an agreement to M/s Asian Hospital does not fall under the category of healthcare services (SAC 9993) and is not eligible for exemption under Sr. No 74 of Notification No. 12/2017-CT(R) dated 28 June 2017. The authority concluded that the contract to supply human resources personnel to M/s Asian Hospital is a taxable event.

3. Exemption of Fee/Charges for Healthcare Services Received by M/s Asian Hospital Under GST:
M/s Asian Hospital provides healthcare services to patients through doctors hired from M/s ARPK. The entire amount charged by M/s Asian from patients, including fees paid to doctors, is towards healthcare services and is exempt under GST. However, the outsourcing of infrastructure by M/s Asian Hospital to M/s ARPK is not covered under the exemption definitions. The authority ruled that the services provided by M/s Asian Hospital are exempt, but the outsourcing of infrastructure to M/s ARPK is not exempt under Notification No. 12/2017-CT(R).

Conclusion:
The scope of supply under the GST Act is vast and covers all aspects of the nature of supplies. The supply between the applicant and M/s Asian Hospital is taxable under the Act. The claim that services rendered by the applicant to M/s Asian Hospital are covered under Notification No. 12/2017-Central Tax (Rate) is not sustainable.

Ruling:
1. Fee/charges received by M/s ARPK from M/s Asian are not exempt under GST.
2. Fee/charges for healthcare services received by M/s Asian are exempt under GST, except for services mentioned under heading 9993 clause no. 31A as per notification no. 03/2022-CT(R) dated 13.07.2022.