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TMI Blog2021 (4) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... e to provide quality healthcare to the people across the globe by inventing, adapting and imbibing world's best technologies and innovations. 'Catering total health care under one roof at most affordable costs' has been their motto, which has helped them establish a chain of multispecialty hospitals and vibrant OPD centers across India and the world. 4. The applicant submitted that they are one of India's leading Multi-specialty, corporate healthcare providers having presence across Central and Western part of India. They are in forefront of providing pioneering, qualitative medical services at affordable costs within its home base - Gujarat and have full- fledged hospitals at Ahmedabad, Surat and Vapi. 5. The applicant submitted that they are NABH accredited hospital providing quality care to the patients. They provide highest standard of clinical skills and nursing care across an extensive range of specialties and attract world-class doctors and surgeons from the leading hospitals. Delivering a wide-ranging array of medical services, offer inpatient, outpatient, day care treatment, Surgery, emergency & trauma care in the surroundings. There are various specialty and super-speci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne and food as part of treatment under supervision till discharge from the hospital. The nature of the various services in a bundle of services will help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and other services combined with such service are in the nature of incidental or ancillary services which help in better utility of main service. Hence the medicines, implants, room provided on rent, dietary food advised by nutritionists etc. used in the course of providing health care services to the patients admitted for diagnosis or treatment in the hospital or clinical establishment is undoubtedly naturally bundled in the ordinary course of business. The patients expect to receive health care services by way of an appropriate diagnosis, appropriate medicines as well as relevant consumables or implants required to make sure that they get the best possible treatment. Hence the medicine and allied goods supplied to inpatient are indispensable items and it is a composite supply to facilitate health care services. 10. Section 2(30) of the CGST Act, 2017 reads as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc. Will GST be applicable on such money retained by the hospitals? (3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST. Health care services provided by a clinical establishment, an authorised medical practitioner or paramedics are exempt. [Sl. No. 74 of notification No. 12/2017-C.T. (Rate), dated 28-6-2017 as amended refers (1) ---------------- (2) Healthcare services have been defined to mean any service by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In-patient services" classifiable under SAC 999311. 12. The applicant submitted that Health Care Service provided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide Sl. No. 74 of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended. For ease of reference, the relevant entry is given below: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) A--------- Condition (1) (2) (3) (4) (5) 74 Heading 9993 Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or par-medics. (b) services provided by away of transportation of a patient in an ambulance, other than those specified in (a) above. Nil Nil Clinical establishment" is defined in the said notification under 2(s), which states that, "Clinical Establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax component or not? 1. Price/declared tariff does not include taxes. 2. Whether rent on rooms provided to in-patients is exempted? If liable to tax, please mention the entry of CGST Notification 11/2017-C.T. (Rate). 2. Room rent in hospitals is exempt. 3. What will be the rate of tax for bakery items supplied where eating place is attached - manufacturer for the purpose of composition levy? 3. Any service by way of serving of food or drinks including by a bakery qualifies under section 10(l)(b) of CGST Act and hence GST rate of composition levy for the same would be 5%. 14. The applicant submitted that in view of the above, they are of the view that medicines, surgical items, implants, consumables and other allied items provided by the hospital through their hospital in house pharmacy used in the course of providing health care services as well as supply of food and room on rent to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply of In-Patient Healthcare Service. Supply of inpatient health care services by the applicant hospital as defined in Para 2(zg) of the Notification No. 12/2017-Central Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. The applicant has sought for advance ruling in respect of following questions: a) Whether the medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment for patients opting with or without packages along with allied services i.e. (room rent/food/doctor fees Etc.) provided by hospital would be considered as "Composite Supply and accordingly eligible for exemption under the category "HEALTH CARE SERVICES ? 18. At the time of personal hearing held on 23.12.2020, the Authorised Representative of the applicant, reiterated the facts as stated in the application. DISCUSSION & FINDINGS: 19. We have carefully gone through the facts of the case, written and oral submissions made by the applicant in their application for advance ruling as well as at the time of personal hearing and the applicable provisions of the GST Laws in this regard. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, 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 taken during treatment, implants and consumables used during their stay in the hospital. Only on using these medicines, consumable and implants as required and prescribed by the doctors and administered during their stay will the treatment be complete. Hence, supply of medicines, implants and consumables are natural bundled with the supply of health services. In this case, supply of health services is the principal supply as that is the reason the in-p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, rehabilitation services, nursing services and laboratory and technical services, including radiological and anaesthesiological services, etc." Thus, Inpatient services means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt", 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, rooms, food etc. they are exempt under Sl. No 74 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. 23.4 We also agree with the applicant's contention that room rent for patients in hospital is exempted in terms of Circular No.27/01/2018-GST dated 04.01.2018 and the food supplied to the in-patients, as advised by the doctor/nutritionist, is a part of composite supply of health care and not separately taxable. Their reference to the clarifications issued vide Circular No.32/06/2018-GSTdated 12.02.2018 based on the approval of 25th GST Council Meeting held on 18-01-2018 [F.No.354/17/2018-TRU Dt.12-02-2018], is proper. The relevant text of the Circular No. 27 /01/2018-GST dated 4.1.2018, which amply clarifies that room rent, is exempted under Notn. No. 22/2017 CT(Rate), is reproduced under for ease of reference: S.No. Quest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t - In case of indoor patient, since they receive medical facility as per scheduled procedure and have strict restriction to ensure quality/quantity of items for consumption, medicines or allied goods supplied to them is a composite supply under health care services and hence exempt from GST - However, as regards supply of medicines and allied items to outdoor patients is concerned same is an independent supply because such patients are not bound to procure these items from hospital pharmacy - These supplies are, therefore, taxable - Service Accounting Code (SAC) No. 9993. [paras 4, 5, 6, 7] b) In the case of M/s. KIMS Healthcare Management Ltd. Advance Ruling No. KER/17/2018 Dt. 20.10.2018 Authority of Advance Ruling, Kerala reported in ELT 2018 (18) GSTL 831 (AAR-GST )has held that, Composite supply - Health care services - Medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment hospital or clinical establishment - Indispensable items of treatment and naturally bundled in ordinary course of business with health care services - Clarification in C.B.I. & C. Circular No. 27/01/2018-GST, dated 4-1-2018 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in ELT 2019 (24) GSTL 809 (AAR-GST) has held that, Composite services - Health Care services - Supply of medicines, consumables, surgical items, items such as needles, reagents, etc. used in laboratory, room rent used in course of providing Health Care services to in-patients for diagnosis or treatments - In-patient under continuous monitoring of doctors and nursing staff and administration and dosage of medication all under control of doctor and nursing staff - Entire treatment protocol is documented and recorded - Invoice or bill raised for treatment as in-patient being a single bill charging for all facilities or services utilized for treatment in hospital - Supply naturally bundled and provided in conjunction with each other, would be considered as "Composite Supply" - In case of in-patient, hospital provides bundle of supplies classifiable under Health Care services eligible for exemption under Serial No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 2(30) of Central Goods and Services Tax Act, 2017. [paras 5, 6, 7, 9] f) Kindorama Healthcare (P.) Ltd., advance ruling no. ker/47/2019 APRIL 12, 2019 Authority of Advance Ruling, Kerala reported in ELT 2019 (24) GS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th main supply of Health Care services under supervision/direction of medical expert, entire supply is a composite supply with principal supply of Health Care Services in terms of C.B.I. & C. Circular No. 32/06/2018-GST, dated 12-2-2018 - Said service is appropriately classifiable as in-patient services under SAC 999311 of Tariff - Further, since aforesaid service is being supplied by a clinical establishment, same is fully exempt vide S. No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 8 of Central Goods and Services Tax Act, 2017. [paras 5.1, 5.2, 5.3, 5.4] i) Terna Public Charitable Trust order no. GST-ARA-135/2018-19/B-55 May 21, 2019 Authority of Advance Ruling, Maharashtra reported in ELT 2019 (27) GSTL 421 (AAR-GST) has held that, Health care treatment - Supply of medicines, surgical items, implants, consumables and other allied items provided by hospital through hospital owned pharmacy, as well as food, room on rent to the inpatients - Part of composite supply of health care treatment - Exemption under Serial No. 74, Heading No. 9993 of Notification No. 12/2017-C.T. (Rate) to services provided by way of Health Care services by a clinical establishment, an author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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