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TMI Blog2019 (10) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... ided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide SI No 74 of Notification no 12/2017-C.T.(rate) dated 28.06.2017 as amended and SI No 74 of Notification No.II(2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. From a joint reading of the Explanation of service pertaining to Inpatient services and the exemption above, it is evident that the exemption is applicable to a Clinical Establishment , when services by way of diagnosis or treatment or care for illness, etc. are undertaken by such establishment under the directions of a medical doctor - The applicant is a Clinical Establishment and for the health care services as defined in the Notification above is provided including the supply of medicines, implants and consumables, they are exempt under SI No 74 of Notification no 12/2017-C.T. (rate) dated 28.06.2017 as amended and SI No 74 of Notification No.II (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. X X X X Extracts X X X X X X X X Extracts X X X X ..... s and medicines etc., involved in the process, the supply of medicines, implants, consumables is just incidental and naturally bundled to the supply of health care service which is the predominant supply. Hence the supply has to be treated as composite supply with Health Care supply as the predominant supply. 2.1 The Hospital uses medicines, consumables and implants etc. in the course of providing diagnostic and treatment to the in-patients. As the health care services is the predominant service, these supplies which are incidental to and effected in the course of rendering health care service, these supplies would be part of the composite supply where health care service is predominant supply. And since Health Care service is exempt Vide serial No.74 with Heading 9993 and description 'services by way of-(a) health care services by a clinical establishment, an authorised medical practitioner or Para-medics' in notification 12/2017 -Central Tax (Rate) dt. 28.06.17. 2.2 In the case of KIMS HEALTH CARE MANAGEMENT Ltd. = 2018 (11) TMI 281 - AUTHORITY FOR ADVANCE RULINGS, KERALA, the Advance Ruling Authority of Kerala, in similar facts has ruled as under:- The Supply of medicines, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Discharge summary during the discharge of the patient from the hospital. 3.2 The applicant claimed that as can be seen from the bills given as references, presently Shifa Hospitals do not charge anything for medicines procured by the patients from pharmacies. To minimise the time lapse in diagnosis and treatments and hardships undergone by the patients and their caretakers in the current practice, they intend to procure and store the medicines in addition to the consumables implants etc., in the name of the hospital itself and supply the same to the inpatients for their diagnosis and treatments as and when required. All such supplies would also be included in their bills. They submitted sample template for the bills proposed to be raised once this process is started. 4. The Assistant Commissioner (ST) (FAC), the jurisdictional Officer has furnished the comments on the question raised by the Applicant. The officer relying on the decision of the Authority for Advance Ruling, Kerala in the case of M/s. Ernakulam Medical Centre Private Ltd, has opined that the supply of medicines and allied items to the outpatients through the pharmacy attached to the hospital run by the applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicines and consumables and implants are used in their treatment and diagnostics. The in patients are charged for all of these when they are admitted to the hospital which provides services to the in patients. 5.2 Section 2(30) of CGST ACT and TNGST ACT states (30) "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; In the case at hand, the applicant being a hospital/polyclinic undertakes services of diagnosis, treatment which comprises of providing bed/ICU/room, nursing care, diagnostics including lab investigations and treatment surgical or otherwise under the directions of the Doctors. The hospital provides medicines, consumables, implants, etc. to the In-patients in the course of treatment on the directions of medical doctor for which the In-patient is billed together by the hospital. The hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 5.3 The 'Explanation to classification of services' states: SAC 9993 Human Health and social care services 99931- Covers 'Human Health Services' 999311 Inpatient services This service code includes:- i. surgical services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and/or maintaining the health of a patient ii. gynaecological and obstetrical services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and/or maintaining the health of a patient iii. psychiatric services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and/or maintaining the health of a patient iv. other hospital services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and/or maintaining the health of a patient. These services comprise medical, pharmaceutical and paramedical services, rehabilitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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; From a joint reading of the 'Explanation of service' pertaining to 'Inpatient services' and the exemption above, it is evident that the exemption is applicable to a "Clinical Establishment", when services by way of diagnosis or treatment or care for illness, etc. are undertaken by such establishment under the directions of a medical doctor. The applicant is a Clinical Establishment and for the health care services as defined in the Notification above is provided including the supply of medicines, implants and consumables, they are exempt under SI No 74 of Notification no 12/2017-C.T. (rate) dated 28.06.2017 as amended and SI No 74 of Notification No.II (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. 6. In view of the above discussion, we rule as under RULING 1. Medicines, consumables and implants used in the course of providing health care services to in-patients by the applicant is a composite supply of Inpatient Services classifiable unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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