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TMI Blog2020 (1) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to as the 'Applicant' or 'CMC') is engaged in provision of Health Care services to both inpatients and out-patients and they are registered under GST Act with GSTIN 33AAATC 1278N1ZN. They have preferred this Application seeking Advance Ruling on the following questions: 1. Whether the medicines, drugs, stents, consumables and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures would be considered as "Composite Supply" of health care services under GST and consequently can exemption under Notification No. 12/2017 read with Section 8(a) of GST be claimed? 2. Tax liability on medicines supplied to in-patients through pharmacy? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted the copy of Challans evidencing payment of Application Fees of Rs. 5,000/- each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.1 The Applicant has stated that "Christian Medical College Vellore Association (CMC) is a non-profit organization governed by the Christian Medical College Vellore Association, registered under the Societies Regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts. This being a composite supply the principal supply is predominant which is health care and therefore the same is to be considered for tax ability under GST. The ancillary supplies such as room rent and dietary food provided to in-patients also shall be exempt and beyond the ambit of taxation. 2.4 CMC have further stated that Health care services provided by a clinical establishment, an authorized medical practitioner or para medics have been exempted vide Sl. No. 74, of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017. Vide clarifications issued based on the approval of 25th GST Council Meeting held on 18.01.2018 circular No.32/06/2018-GST, (F.No.354/17/2018-TRU Dt. 12.02.2018), it was 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. 2.5 As per Authority of Advance ruling order No. KER/16/2018 Dt.19.09.2018 = 2018 (10) TMI 511 - AUTHORITY FOR ADVANCE RULINGS, KERALA, the following rulings are issued: 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 treatm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is charged to the in-patient bill of the patient. The drugs are kept at the Bed side of the patient and administered by Nurses. * The unused drugs are returned back to the Ward Pharmacies at the time of discharge of the patient and returns adjusted in the Inpatient bills. 4. The Assistant Commissioner(ST), Vellore(Rural), the State Jurisdictional Officer furnished the comments on the questions raised by the applicant vide his letter Rc.A3.1226/2019 dated 26.08.2019, wherein he has stated that * The supply of medicines and allied items provided by a hospital through pharmacy to in-patients is part of composite supply of health care treatment and hence not separately taxable * The similar issue was ordered by GST AAR Kerala in respect of M/s. Ernakulam Medical Centre Pvt. Ltd. Advance Ruling No. Ker/ 16/2018/ 19.09.2018 = 2018 (10) TMI 511 - AUTHORITY FOR ADVANCE RULINGS, KERALA, wherein it is stated that 'Health care services provided by a clinical establishment, an authorized medical practitioner or para medics are exempted vide SL.No. 74 of Notification No. 12/2017-CT(Rate) dated:28.06.2017- Pharmacy is an outlet to dispense medicines or allied items based on prescription ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plants etc. The doctors who treat the in patients themselves prescribe the medicines 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. 6.2 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 incl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such supplies, even when not charged, may be subjected to GST. (3) Food supplied 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. 6.4 The 'Explanation to classification of services' states: SAC 9993 Human Health and social care services 99931- Covers 'Human Health Services' 999311 In patient 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. gynecological 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of transportation of the patient to and from a clinical establishment, but does 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 hospital is a Clinical Establishment and for the health care services as defined in the Notification above provided including the supply of medicines, implants and consumables, they are exempt under Sl No 74 of Notification no 12/2017 -C.T. (rate) dated 28.06.2017 as amended and Sl.No. 74 of Notification No.II(2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. 7. In view of the foregoing, we rule as under: RULING 1. Medicines, drugs, stents, consumables and implants used in the course of providing health care services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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