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TMI Blog2023 (6) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Innovations Medi research Private Limited, B-l Ashadeep Enclave-A, Near Akshyapatra Jaipur, 302025, Rajasthan (hereinafter referred to as "applicant") GSTIN 08AADCI2651K1ZH. Applicant is registered as registered under Companies Act, 2013 located in the state of Rajasthan. A unit of the applicant is providing treatment to the patients suffering from Cancer under the name of Asian Cancer Hospital located a B-1, Ashadeep Enclave-A, opposite Ashadeep Green Avenue, Nilay Kunj Road, Jagatpura, Jaipur in the state of Rajasthan. The question raised by applicant in respect of a patient who is admitted in the hospital and is treated as inpatient is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (b), (e) & (g) given as under: (b) applicability of a notification issued under the provisions of this Act; (e) determination of the liability to pay tax on any goods or services or both; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term; A SUBMISSION OF THE APPLICANT:(in brief) 1 M/s Innovations Modi research P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an admission process and shifted to a ward/room, where they are provided nursing care and treatment. * The patients are given required medicines as prescribed by the doctors during his treatment. A Vital Chart of the in-patient is also maintained where details like BP, pulse, SPO2, temperature, RR are captured. The patient is visited by the doctor who assesses and review the medicines being given to the patient. A follow up sheet is maintained for all inpatients wherein details of their clinical finding and treatment advised is maintained. A specimen patient's Vital Chart and Follow up Chart has been annexed as specimen and marked as Annexure 3. * The patients also undergo procedures such as chemotherapy during their treatment. iii. Discharge and Billing * The patients are discharged after the treatment is over. A Discharge Summary is generated at the time of discharge of the patient's containing details like diagnosis, clinical history, vitals, treatment given, medication advised, etc. * Further, the patient are billed for the full treatment that they have been provided end to end which includes consultation, medicines and other procedures that are provided durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Schedule I, made or agreed to be made without a consideration [(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.] 5. That as per Section 2(30) composite supply is defined as (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; (90) "principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; 6. That as per Section 8 - Tax liability on composite and mixed supplies. The tax liability on a composite or a mixed supply shall be determined in the following manner, namely:- (a) a composite supply comprising two or more supplies, one of which is a principal supply, shall be treated as a supply of such pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence in such a case, the levy of tax would not be attracted. In the given scenario, on perusal of fact, it is evident that all the four elements as specified above are available to qualify the treatment of cancer Patients by the applicant as a supply. 12 That, in continuation of above, the subsequent issue for determination is whether this transaction is an individual supply of service or goods or both or whether it's a composite supply. A Composite Supply, from its definition under the Act(s) has following elements: a) a supply made by a taxable person to a recipient b) consisting of two or more taxable supplies of goods or services or both, or any combination thereof, c) which are naturally bundled and supplied in conjunction with each other d) in the ordinary course of business e) And one of which is a principal supply. 13. That in treatment of an inpatient, the procedure is a chronological combination of the following services: a) Consultancy and examination b) Dispensing of Medicine as prescribed by doctor c) Providing other procedures such as Chemotherapy 14. That for a supply to become a composite supply, there must be minimum two independent supplies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imilar view has been held in case of Card Protection Plan Ltd v. Commissioners of Customs and Excise [2012] 22 taxmann.com 176 (ECJ). Two or more acts to be regarded as a single supply if they are so closely linked that they form a single indivisible economic supply: Where a transaction comprises a bundle of features and acts, then, whether it constitutes one single supply, or, two or more supplies should be determined taking into account the facts and circumstances of the case. There may be a single supply where some element(s) constitute the 'principal' supply, while others are 'ancillary'. Further, if two or more elements or acts supplied by the taxable person to the customer are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split, then, all those elements would constitute a 'single supply' for the levy of tax. The fact that a single price is charged for all elements is not conclusive. [Para 18] 21. That similarly in case of LevobVerzekeringen BV and OV Bank NV v Secretary of State for Finance, Netherlands* [2012] 22 taxmann.com 174 (ECJ) it was held Service - Definition of - Und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case he requires a medical procedure, information regarding the particulars of the procedure and the cost. The patient is, thereafter, informed of the particulars of the medical procedure, the drugs, implants, stents etc. that are required for his treatment/medical procedure and the cost. The patient accepts the offer and opts for a particular procedure. Once having opted for a particular procedure, the choice of the drugs, implants, stents etc. would depend upon medical advice and only where, medically permissible, the choice of the patient. The question posed before us would, therefore, have to be further refined, namely, whether a medical procedure can be severed into separate elements of service and sale with service being the medical advice and medical procedure and the sale being the supply of medicines, surgical items, implants, to patients whether as part of a package or to an individual patient? "We therefore, have no hesitation in holding that medical procedures/services offered by the petitioners are a service. The supply of drugs, medicines, implant, stents, valves and other implants are integral to a medical services/procedures and cannot be severed to infer a sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nent of composite supply, where principal supply i.e. healthcare services falling under SAC 9993 11, exempted as per entry at SI. No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 2(30) of Central Goods and Services Tax Act, 2017. -The patients admitted to a hospital for treatment expect that proper diagnosis of the disease is made and treatment including appropriate medicines, surgical procedures if necessary, consumables and implants required along with proper diet is administered to them in the most efficient manner so that they can regain their health within the shortest possible time and resume their activities, [paras 8.7, 8.8, 8.9] 26 That in case of KIMS Health Care Management Ltd reported in 2018 (18) GSTL 831 (AAR GST) it was held by the AAR authority 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 that room rent in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution 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 a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases. 31. That, there is no ambiguity in the fact that the whole process of examination of cancer patients is a treatment which is based on allopathic science of medicine. 32. That whether allopathy is recognized system of medicine in India or not was answered in erstwhile Education Guide issued by CBEC on 1-7-2012 when negative list was implemented under the Service Tax Regime. The question asked and answer to same which is relevant for the query in hand is reproduced. 7.2.1 Are all health care services exempt? No. only services in recognized systems of medicines in India are exempt. In terms of the Clause (h) of Section 2 of the Clinical Establishments Act, 2010, the following systems of medicine are recognized systems of medicines: * Allopathy * Yoga * Naturopathy * Ayurveda * Homeopathy * Siddha * Unani * Any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormity, abnormality or pregnancy in any recognized system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases; 37. That there is no ambiguity in the fact that the applicant is a Clinical Establishment since it is registered under section 15 of Clinical Establishment (Registration and Regulation) Act, 2010 for providing medical Services as a Single Specialty under Allopathy System Of medicine. 38. That, the applicant is providing services of Treatment of patients suffering from Cancer specifically using Allopathy system of medicine., Allopathy is recognized systems of medicines in India as per Clause (h) of Section 2 of the Clinical Establishments Act, 2010. 39. That based on above paras, it is understood that the Asian Cancer Hospital is providing Health care services through a Clinical Establishment as defined in para 2(s) of the Notification No. 12/2017-Central Tax (Rate), dated 28 6-2017. The Clinic run by the applicant are very well recognized by the government itself as clinical establishments. 40. That the treatment being provided to inpatients is a single supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made at the time of hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. We would like to discuss the submission made by applicant and will take up the above question for discussion one by one. 2) The applicant M/s Innovations Medi-research Private Limited (hereinafter referred to as "applicant") registered under Companies Act, 2013 located in the state of Rajasthan. Applicant have one unit M/s Asian Cancer Hospital located a B-1, Ashadeep Enclave-A, opposite Ashadeep Green Avenue, Nilay Kunj Road, Jagatpura, Jaipur in the state of Rajasthan which is providing treatment to the patients suffering from Cancer. Applicant submitted provisional registration certificate issued under section 15 of The Clinical Establishment (Registration and Regulation) Act, 2010. 3) The applicant submitted that the unit of applicant i.e M/s Asian Cancer Hospital, is providing Treatment of patients suffering from Cancer. The applicant is involved in providing Outpatient Facility also and after examination patient is admitted. The applicant has asked the advance ruling in respect of treatment of in patient in M/s Asian Cancer Hospi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017 and whether this is composite supply or not. 7.1) The relevant portion of Notification no. 12/2017-CGST Rate dated 28-06-2017 as amended is as under-: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 74 Heading 9993 Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner, or para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above. nil nil 7.2) before moving forward, we would like to analysis certain terms i.e "authorised medical practitioner", "clinical establishment", and "health care services" in light of above said notification. As per notification- 2(k) "authorised medical practitioner" means a medical practitioner registered with any of the councils of the recognised system of medicines established or recognised by law in India and includes a medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force; 2(s) "clinical establishment" means a hospital, nursing home, cli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atients 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. 7.6) In light of definitions as discussed above and clarification circulars on room rent and food supply by hospital to in-patients, we held that same principle should be applicable in case of dispensing of medicine to in- patient. We observe that the said supplies amounted to composite supply and eligible for exemption under category health care services". 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 incidental or ancillary services which help in better utility of main service then the various elements of the service are said to be naturally bundled in the ordinary course of business. 7.7) we also find that various the Authority of Advance Ruling passed ruling that the supply of medicines and allied items provided by the hospi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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