2018 (5) TMI 1737 - AAR - GST

Levy of GST on Health care services - diagnosis, pre & post counseling therapy and prevention of diseases by providing sophisticated and relevant tests - N/N. 12/2017- Central Tax (Rate) dated 28th June, 2017 - Whether the Applicant qualifies as clinical establishment? - Whether the services provided by the applicant qualifies to be health care services? Clinical Establishment - Held that - The applicant offers services/facilities requiring diagnosis such as patient counselling, suggesting the relevant test for the patient, collecting samples, obtaining the result of the test, sharing the test results and post counselling. The medical team of the applicant discusses with the oncologist/pathologist, takes samples of required tissues and send it for the tests to US/Germany, with regard to the oncology/auto immune deceases. They play the role of referral/physician and also advice doctors for line of treatment to the establishment. They provide the said services in Allopathy system, of medicines, recognised in India. Therefore they qualify to be a clinical establishment. Health Care Services - Held that - The Applicant is involved in providing the services of diagnosis, pre & post counseling therapy and prevention of diseases by providing tests that are sophisticated and relevant. The medical team of the applicant is involved in the complete cycle and hence they facilitate the diagnosis process and therefore the services provided by the applicant qualify to be health care services. Ruling - The applicant qualifies to be a clinical establishment and the services offered/provided by the Applicant qualify to be Health Care Services - The intra-state supply of said services attract NIL rate of central tax as per SL.No.74 of the Notification No. 12/2017- Central Tax (Rate) dated 28th June, 2017.

Summary

Issues involved:
1. Taxability of services provided by M/s Sayre Therapeutics Pvt. Ltd.
2. Qualification as a clinical establishment.
3. Classification of services as health care services.

Analysis:

Issue 1: Taxability of services provided by M/s Sayre Therapeutics Pvt. Ltd.
The applicant, a healthcare company dealing with oncology and immunology therapy and diagnostics, sought an advance ruling claiming that their services are covered under health care services and hence qualify as nil rated supply. The applicant provides sophisticated tests related to oncology and auto immune disorders, collaborating with diagnostic companies to offer advanced genetic diagnostic tests. The Medical team is actively involved in the testing process, from patient counseling to sharing results and post-test counseling. The services provided by the applicant meet the criteria of health care services as per the relevant notification.

Issue 2: Qualification as a clinical establishment
The definition of a clinical establishment includes institutions offering services requiring diagnosis or treatment for illnesses in any recognized system of medicines. In this case, the applicant's services involve patient counseling, suggesting relevant tests, collecting samples, obtaining test results, and post-counseling. The medical team plays a crucial role in the diagnosis and treatment process, interacting with oncologists and pathologists, and providing services in the recognized "Allopathy" system of medicine. Therefore, the applicant qualifies as a clinical establishment based on the services offered.

Issue 3: Classification of services as health care services
Health care services are defined as services related to diagnosis, treatment, or care for various conditions in any recognized system of medicines. The applicant's services include diagnosis, pre and post-counseling, therapy, and prevention of diseases through relevant tests. The involvement of the medical team in the entire testing process supports the qualification of these services as health care services. Consequently, the ruling states that the applicant qualifies as a clinical establishment, and the services provided are classified as Health Care Services, attracting a nil rate of central tax as per the relevant notification.

This detailed analysis of the judgment highlights the key aspects considered by the Authority for Advance Rulings in determining the taxability and classification of services provided by M/s Sayre Therapeutics Pvt. Ltd.