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TMI Blog2019 (3) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... tated that the medicines and surgical items supplied through the pharmacy to the patients under medical prescription of doctors is entitled to exemption, being health care services, No medicines are sold to customers, who do not consult doctors either as inpatient or as outpatient. The medicine supplied through the pharmacy is incidental to the health services rendered in the hospital. The pharmacy is meant exclusively for dispensing medicine and consumables to the inpatients or outpatients. No medicines or allied items are sold to outsiders, who come with the prescription from outside doctors. Medicine sale is restricted only to the patients, who take registration in the hospital. Under pre-GST period there were several decisions pertaining to the point that the supply of medicines, surgical items, x-ray etc., to the patients in the course of treatment by hospital cannot be said to be sale. 3. The Authority for Advance Ruling had deliberated on the issue raised and after hearing the authorized representative of the applicant elaborated as follows; 3.1. Health care services provided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-02-2018, has clarified that food supplied to the inpatients as advised by the doctor/nutritionist is a part of composite supply of health care and not separately taxable. Other supplies of food by hospital to patients not admitted are ta_able. The same principle is also applicable in the case of dispensing of medicine, 5. Based on the above deliberations, the Advance Ruling Authority ruled vide order read 1st above that; i) The supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of composite supply of health care treatment and hence not separately taxable. ii) The supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients is taxable. 6. Aggrieved by the said Advance ruling, the appellant preferred appeal vide paper read 2nd above, before the Appellate Authority for Advance Ruling. The appellant has stated that the ruling by the Advance ruling Authority is opposed to law, facts, circumstances and the legislative intent behind the exemption granted vide Notification No. 12/2017-CT(Rate) dated (Sl. No. 74). GROUNDS OF APPEAL 7. The authorized representative of the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly exclusion is of food supplied to the outpatients and bystanders and visitors of the canteens run by the hospital, which is not related to the healthcare given to the patients. The notification having not restricted health care services rendered to outpatients, the interpretation put upon the same by the Advance Ruling Authority militates against the legislative intent. The action of the authority in treating medicines supplied to outpatients on the same pedestal as food supplied from the canteen or restaurant run by the hospital is quite erroneous. The Authority failed to note that the appellant never sells medicines from the pharmacy to customers at large and medicines are supplied only to the patients, who avail the service of the medical officers on due consultation. DISCUSSIONS AND FINDINGS 8. The Appellate Authority heard the authorized representative of the appellant. During the personal hearing, the authorized representative reiterated the contentions raised in the grounds of appeal. Further, he produced the case sheets and invoices raised on inpatients and outpatients, who underwent treatment in the hospital. He further deposed that the pharmacy has been maintained fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staff and administration and dosage of medication is all under the control of the doctor and the nursing staff. The entire treatment protocol is documented and recorded. The invoice/bill raised for the treatment as an inpatient is a single bill Charging for all the facilities/ services utilized for the treatment in the hospital including room rent, nursing care charges, laboratory, consumables, medicines, equipment charges, doctor's fee, etc. Thus, it is clear that in case of an inpatients the hospital has provided a bundle of supplies which is classifiable under h care services. 11. The authorized representative has deposed that often in the case of inpatients after discharge from the hospital also, periodical consultation of doctors and supply of medicines under their prescription is made. In such instances, whether the inpatient after discharge from the hospital comes back for periodical follow up consultation is at his own discretion, which is outside the control of the hospital. The hospital in no way can insist that the medicines should be purchased from the pharmacy run by the hospital. Further, on scrutiny of the invoice submitted along with the case sheet of an inpat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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