2019 (11) TMI 154 - AAR - GST

Liability of GST - supply of medicines, drugs and other surgical goods from its pharmacy to inpatients - supply of medicines, drugs and other surgical goods from its pharmacy to outpatients - supply of incidental services as ' X-ray, Clinical laboratory etc rendered as part of health care service - supply of Implants and artificial limbs made during course of treatment to patients. Whether the applicant, a Multi Speciality Hospital is liable to pay GST on supply of medicines, drugs and other surgical goods from its pharmacy to inpatients? - HELD THAT - The supply of medicines, drugs and other surgical goods from its pharmacy to in-patients are in the course of providing health care services which are naturally bundled and are provided in conjunction with each other, would be considered as ' Composite Supply and eligible for exemption under the category health care services'. Whether the applicant, a Multi Speciality Hospital is liable to pay GST on supply of medicines, drugs and other surgical goods from its pharmacy to outpatients? - HELD THAT - The supply of medicines, drugs and other surgical goods by the hospital from its pharmacy to out-patients as part of health care services is a taxable supply of goods and thereby GST is applicable. Whether the applicant is liable to pay GST on supply of incidental services as ' X-ray, Clinical laboratory etc rendered as part of health care service? - HELD THAT - As per SRO.No.371/2017 vide sl.no.74 (Notification No. 12/2017-CT (Rate) dtd,28-06-2017), services by way of diagnosis come under the category of health care services covered under SAC 9993 and thereby exempted. Whether the applicant is liable to pay GST on supply of Implants and artificial limbs made during course of treatment to patients? - HELD THAT - The supply of goods like wheel chairs, tricycles etc to the patients cannot be considered as a composite supply where the principal supply is health care services and accordingly will be liable to GST as individual supply of goods.

Issues:
1. Liability of Multi Speciality Hospital to pay GST on supply of medicines, drugs, and surgical goods to inpatients.
2. Liability of Multi Speciality Hospital to pay GST on supply of medicines, drugs, and surgical goods to outpatients.
3. Liability of Multi Speciality Hospital to pay GST on supply of incidental services like X-ray and Clinical laboratory as part of health care service.
4. Liability of Multi Speciality Hospital to pay GST on supply of implants and artificial limbs during treatment to patients.

Analysis:
1. The Multi Speciality Hospital is not liable to pay GST on the supply of medicines, drugs, and surgical goods to inpatients. These supplies are considered a "Composite Supply" provided in conjunction with health care services, falling under the exemption category of "health care services."

2. The supply of medicines, drugs, and surgical goods to outpatients by the hospital is taxable as a supply of goods under GST, making it liable for GST payment.

3. Incidental services such as X-ray and Clinical laboratory services rendered as part of health care services are exempted from GST under SAC 9993, as per SRO.No.371/2017.

4. The supply of artificial body parts/devices like heart valves, artificial kidneys, etc., implanted through surgical procedures is considered a composite supply with the principal supply being health care services, thus exempt from GST. However, the taxability of supplies like wheelchairs, tricycles, etc., provided to patients is determined on a case-to-case basis and may be liable for GST as individual supply of goods.

This ruling aligns with previous judgments by the Authority for Advance Ruling, Kerala, emphasizing the classification of supplies as composite or individual based on their nature and relation to health care services, ensuring clarity on the GST liability of Multi Speciality Hospitals for various services and goods provided to patients.

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