2020 (3) TMI 896 - AAR - GST

Clinical establishment or not - supply of health care service from a clinical establishment - exempt under Entry No. 74 of the Exemption Notification or not - whether the Applicant is a clinical establishment that provides health care services by way of diagnosis, treatment or care for illness in any recognised system of medicines in India? HELD THAT - Bundled supplies of two or more taxable goods or services, one of which is identifiable as principal supply within the meaning of section 2 (90) of the GST Act, is defined as composite supply under section 2 (30) of the said Act if they are naturally bundled and supplied in conjunction with one another in the ordinary course of business. All other bundled supplies are clubbed under the term mixed supply. The Applicant s submissions, however, do not clarify or claim that its plant-based preparations are manufactured exclusively in accordance with the formulae described in any authoritative book of Ayurveda specified in the First Schedule of the Drugs and Cosmetics Act, 1940. It does not claim that the persons administering the plant-based preparations are authorised medical practitioners in Ayurveda within the meaning of Para No. 2 (k) of the Exemption Notification. The Applicant has not clarified whether these persons possess the medical qualification included in the Second Schedule of the Indian Medicine Central Council Act, 1970 and registered under the said Act as medical practitioners. This Authority cannot accept the Applicant s claim that it is a clinical establishment offering treatment in the recognised ayurvedic system of medicine. Its supplies are not, therefore, health care service by a clinical establishment, as defined under Para No. 2(s) of the Exemption Notification - Applicant s supply is, therefore, not exempt under Entry No. 74 of the Exemption Notification. It needs to remain registered, as its liability to pay GST does not cease.

Summary

Issues:
1. Admissibility of the Application
2. Interpretation of Exemption Notification Entry No. 74

Admissibility of the Application:
The Applicant sought a ruling on whether their service of "Phytotherapy" for treating osteoarthritis is exempt under a specific Notification and if registration under the GST Act is necessary. The questions raised were found admissible under the GST Act, as confirmed by the Revenue officer, leading to the acceptance of the application.

Interpretation of Exemption Notification Entry No. 74:
The Applicant claimed that their treatment method, combining phytotherapeutic techniques with ayurvedic medicines, qualifies as a health care service under the Exemption Notification Entry No. 74. However, the Authority found that the Applicant's offerings did not meet the criteria of a clinical establishment providing health care services in a recognized system of medicine in India. The Authority highlighted the lack of clarity regarding the exclusive use of ayurvedic formulas and the qualifications of the practitioners administering the treatments. Consequently, the Applicant's supply was deemed not exempt under the said Entry, requiring them to maintain GST registration.

This detailed analysis of the judgment provides insights into the admissibility of the application and the interpretation of the Exemption Notification Entry No. 74, emphasizing the criteria for exemption under the GST Act.