EXEMPTION TO HEALTH CARE SERVICES

[Dr. Sanjiv Agarwal]

 Health care Services by a Clinical Establishment or Authorized Medical Practitioner or Para medics are exempt from Service Tax vide Notification No. 25/2012-ST dated 20.06.2012 w.e.f 1.7.2012

“Health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any organization system of medicine and includes services by way of supply of meals for the patient or transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.

As per Oxford Dictionary, health care means the maintenance and improvement of physical and mental health, especially through the provision of medical services.

As per Wikipedia, health care is the diagnosis, treatment, and prevention of disease, illness, injury, and other physical and mental impairments in humans. Health care is delivered by practitioners in medicine, chiropractic, dentistry, nursing, pharmacy, allied health, and other care providers. It refers to the work done in providing primary care, secondary care and tertiary care, as well as in public health.

All health care services shall not be exempt but only recognized systems of medicine are covered under exemption. In terms of the Clause (h) of section 2 of the Clinical Establishments Act, 2010, the following systems of medicine are recognized systems of medicine:

• Allopathy

• Yoga

• Naturopathy

• Ayurveda

• Homeopathy

• Siddha

• Unani

• Any other system of medicine that may be recognized by Central Government.

“Authorised medical practitioner” means any medical practitioner registered with any of the Councils of the recognised system of medicine and includes medical professional having the requisite qualification to practice in any recognised system of medicine as per any law for the time being in force.

According to Oxford Dictionary, medical practitioner is a physician or surgeon.

“Clinical establishment” means a hospital, nursing home, clinic, sanatorium or an institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicine, established and administered or maintained by any person or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases.

Section 2(e) of the Clinical Establishments (Registration and Regulation) Rules, 2010 defines clinical establishment as a hospital, maternity home, nursing home, dispensary, clinic, sanatorium or an institution by whatever name called that offers services, facilities requiring diagnosis, treatment or care. For illness, injury, deformity, abnormality or pregnancy in any recognised system of medicine established and administered or maintained by any person or body of persons, whether incorporated or not; or (ii) a place established as an independent entity or part of an establishment referred to in sub clause (I), in connection with the diagnosis or treatment of diseases where pathological, bacteriological, genetic, radiological, chemical, biological investigations or other diagnostic or Investigative services with the aid of laboratory or other medical equipment, are usually carried on, established and administered or maintained by any person or body of persons, whether Incorporated or not, and shall include a clinical establishment owned, controlled or managed by

(a) The Government or a department of the Government;

(b) A trust, whether public or private;

(c) A corporation (including a society) registered under a Central, Provincial or State Act, whether or not owned by the Government;

(d) A local authority; and

(e) A single doctor,

But does not include the clinical establishments owned, controlled or managed by the Armed Forces constituted under the Army Act, 1950, the Air Force Act, 1950 and the Navy Act, 1957.

As per Oxford Dictionary, clinical means relating to the examination and treatment of patients and their illnesses; Establishment means organization, a large institution, or a hotel; the act of starting or creating something that is meant to last for a long time.

Literally, health implies the state of being free from illness or injury, a person’s mental or physical condition. It is a state of complete physical, mental and social well being and not merely an absence of a disease or infirmity. The organized provision of medical care to individuals or a community is called health care. The services in relation to medical care are called health services.

The word “hospital” has been derived from the Latin “hospes” which refers to either a visitor or the host who receives the visitor. From “hospes”, came the Latin “hospitalia”, an apartment for strangers or guests, and the medieval Latin “hospitale” and the Old French “hospital”. It crossed the Channel in the 14th century and inEngland began a shift in the 15th century to mean a home for the elderly or infirm or a home for the down-and-out. “Hospital” only took on its modern meaning as an institution where sick or injured are given medical or surgical care in the 16th century only.

A ‘clinic’ or outpatient clinic is a small medical facility that provides health care for ambulatory patients – as opposed to inpatients treated in a hospital. Most clinics are run by one or more general practitioners – (Wikepedia). For example, a clinic run by a specialist which offers multi specialties like cardiac care, diabetic care, general medicine may be called multi-specialty clinic.

A clinic is a place or hospital department where patients are given medical treatment or advice, especially of a specialist nature. A hospital is an institution providing medical and surgical treatment and nursing care for sick and injured people. Hospital means an institution for the reception and care of sick, wounded, infirm or aged persons and include government or private hospitals, nursing homes and clinics.

A nursing home is a small private establishment providing health care services with accommodation.

‘Nursing home’ is a residential facility for persons with chronic illness or disability, particularly, older people who have mobility and eating problems, also called a convalescent home or long-term care facility.

Paramedics are trained health care professionals, for example nursing staff, physiotherapists, technicians, lab assistants etc. They are accountable for their services when provided independently. Services by them in a clinical establishment would be in the capacity of employee and not provided in independent capacity and will thus be considered as services by such clinical establishment. Similarly services of assisting an authorized medical professional would be considered as services by such authorized medical professional only.

The services to be exempt must, therefore –

(a) be health care services

(b) be provided by -

(i) a clinical establishment, or

(ii) an authorised medical practitioner, or

(iii) para-medics

Health care services were brought under service tax by the Finance Act, 2012 but exempted under Notification No. 30/2011-ST dated 25.4.2011 w.e.f. 1.5.2011.

 

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