2023 (6) TMI 487 - AAR - GST

Exemption form GST - Composite supply or not - health care services or not - supply of services by treatment of patients suffering from SUD as out-patient - Applicability of entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017 - HELD THAT - There is no dispute that treatment of SUD Patients by the applicant is supply Sec. 7(1) of CGST Act, 2017 and falls under the ambit of GST - The patients are being examined by applicant through its Single Specialty Psychiatrist under Allopathy System of Medicine by Dr Rmet Sonia Dsouza (MBBS, MD), who gives medicines to outdoor patients of applicant Thus, it is observed that applicant is involved to treat out door patients only and medicines are being provided by applicant only as per requirement of patient Thus, applicant is involved in supply of service as well supply of goods i.e medicine. Whether the supply made by applicant is exempt under entry 74(a) of notification no 12/2017-CGST Rate dated 28 06 2017? - whether this is composite supply or not? - HELD THAT - As per Section 2(30) of CGST Act, 2017, defines Composite supply as supply consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. Healthcare service is exempt from GST Tax. Whereas supply of medicines is taxable - the supply to the in-patients by the hospitals, as advised by the doctor may be a part of composite supply of healthcare and not separately taxable, but Here in this case it is observed that medicines are providing by applicant to outdoor patient. Applicant claimed that these medicines are not available in market thus the medicine supplied by them is a composite supply - there are nothing supporting that establish that the medicine form part of counselling services provided by physiatrist. Thus, it is observed that the supplies being made by applicant are not composite supply. Services for the prevention and treatment of substance misuse and substance use disorders have traditionally been delivered separately from other mental health and general health care services, because substance misuse has traditionally been seen as a social or criminal problem, prevention services are not typically considered a responsibility of health care systems. Further people needing care for substance use disorders have had access to only a limited range of treatment options that were generally not covered by insurance. Well-supported scientific evidence shows that the substance uses disorder treatment and mental health services from mainstream health care have traditional separation. Thus considering definition of health care services as narrated in Notification no. 12/2017-CGST Rate dated 28-06-2017 as amended, and above discussion we held that substance use disorder is out of ambit of health care services and supply of services by treatment of patients suffering from SUD as out-patient don't fall under the definition of health care services so not exempt under entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017.

Summary

Issues Involved:
1. Applicability of a notification issued under the provisions of the GST Act.
2. Determination of the liability to pay tax on any goods or services or both.
3. Requirement of registration for the applicant.

Summary:

1. Applicability of Notification:
The applicant, a clinical establishment registered under the Clinical Establishment (Registration and Regulation) Act, 2010, sought clarity on whether the treatment of patients suffering from Substance Use Disorder (SUD) as outpatients is exempt under entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017. The relevant portion of the notification exempts "health care services by a clinical establishment, an authorised medical practitioner, or para-medics."

2. Determination of Tax Liability:
The applicant argued that the treatment of SUD patients, including the dispensing of medicines, should be considered a composite supply of healthcare services, which is exempt from GST. The treatment process involves registration, counseling, examination, and dispensing of government-controlled medicines, which are not available in general medical stores.

3. Requirement of Registration:
The applicant is a registered clinical establishment providing medical services under the Allopathy System of Medicine. The main issue was to determine whether the supply of services by treating SUD patients as outpatients is a composite supply and thus exempt from GST.

Findings and Analysis:
- The Authority examined the provisions of the CGST and RGST Acts, the Clinical Establishments Act, 2010, and the Mental Healthcare Act, 2017.
- It was observed that the treatment of SUD patients involves both the supply of services and goods (medicines). However, the supply of medicines is not naturally bundled with the counseling services provided by the psychiatrist.
- The Authority concluded that the treatment of SUD patients does not fall under the definition of "health care services" as per the notification no. 12/2017-CGST Rate dated 28-06-2017. Substance use disorder treatment is traditionally separated from other healthcare services and is not covered under the exemption for healthcare services.

Conclusion:
The Authority ruled that the supply of services by treating patients suffering from SUD as outpatients is not exempt under entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017. Therefore, the applicant is liable to pay GST on such services.