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TMI Blog2024 (1) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... would be considered as Composite Supply of health care services under CGST Act, 2017 KGST Act, 2017 and consequently, can exemption under Services Exempt Notification No. 12/2017-Central Tax (Rate) dated: 28-06-2017 read with Section 8(a) of GST be claimed? - HELD THAT:- The Applicant is running a hospital and providing treatment to in-patients suffering from psychic disorder, substance use disorder, Neurology etc. The Applicant is a hospital hence, the same is covered under clinical establishment as per the definition mentioned supra and since the hospital is providing treatment to in- patients suffering from psychic disorder, substance use disorder, Neurology etc the same is covered under health care services as per the definition mentioned. In view of the above, the Applicant is providing health care services subjected to the condition that room charges are not exceeding Rs. 5000 per day to a person receiving health care services. The patients admitted to a hospital undergo proper diagnosis of the disease/illness and then treatment which includes appropriate medicines, surgical procedures which need necessary consumables required along with proper diet. These are provided to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or exemption as per entry No. 74(a) of Notification No. 12/2017-Central Tax (Rate) dated: 28-06-2017 subjected to the condition mentioned therein. ii) The supply of food to in-patients would be considered as Composite Supply of health care services qualifying for exemption as per entry No. 74(a) of Notification No. 12/2017-Central Tax (Rate) dated: 28-06-2017 subjected to the condition mentioned therein. iii) GST is not applicable on money retained by the applicant. iv) GST is not exempted on the fees collected from nurses and psychologists for imparting practical training. X X X X Extracts X X X X X X X X Extracts X X X X ..... erapy 5. Child guidance clinic 6. Psychotherapy and Counselling 7. Psychometric, I.Q. tests and others. 8. Relaxation therapy 9. Mental Retardation Clinic 10. Occupational therapy and Day care Services 11. De addiction to Drugs, Alcohol and Smoking 12. Marital Counselling 13. Industrial Counselling 14. Group counselling - ALCOHOLICS 15. Carer's Meet - SCHIZOPHRENICS B. Other Services: 1. Medicine 2. Surgery 3. Obstetrics and Gynecology 4. Neurology 5. Neurosurgery 6. E.N.T 7. Ophthalmology 8. Orthopaedics 9. Endocrinology 10. Urology 11. Pediatric's C. Facilities 1. Physiotherapy 2. X-Ray 300ma & amp; Portable 3. Laboratory having tie-up with Kanva Diagnostic Services Pvt Ltd 4. Electrocardiography(ECG) 5. Cardiac Monitor with defibrillator 6. Minor and Major O.T/ Labour Ward with C-Arm facility 7. Casualty 8. Electroencephalography (EEG) 9. Nerve Conduction Studies (E N M G) 10. Computerised Stress Test (Treadmill Test) 11. Pulse oximeter 12. Ambulance 13. SPANDANA PHARMA WITH SCHEDULE-X & ND-V Licenses. 14. ICU CARE WITH VENTILATORS. 15. Training Centre for GNM, B.Sc(N), Univ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilitation Research and Training Centre (ii) A billing card is maintained recording all the details of visits and diagnosis by Doctors, various types of treatment including electric shock given to patients. (iii) Doctor's daily progress report containing details of prescriptions of tests and medicines and other care to be undertaken is maintained. 10 (iv) A drug chart is maintained at the wards / rooms having details of drugs given to the in-patients during their stay as in-patients. (v) Investigations chart is prepared during the course of various tests done. (vi) Bills are prepared for all types of health care services provided by the Hospital for day to day health care services during the period of stay as inpatient. (vii) Final discharge bill will be prepared at the time of discharge of the in- patient. (viii) Discharge summary during the discharge of in-patient from the hospital will also be prepared. 5) (i) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 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 investigate services of diseases. (vi). The Explanatory Notes to the Scheme of Classification of Services (SCS) under GST pertaining to Health Care services is reproduced below; SCS 9993 Human Health and Social Care Services SCS 99931 - Human Health Services SCS 999311 - Inpatient services This service code includes: (a) surgical services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and / or maintaining the health of a patient. (b) 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. (c) Psychiatric services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and / or maintaining the health of a patient. (d) Other hospital services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and / or maintaining the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o inpatients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply where the principal supply is healthcare services falling under SCS 999311 which is exempted as per entry at Sl. No. 74 of Services Exempt Notification No. 12/2017 Central Tax (Rate) dated 28.06.2017. 7) The applicant has placed reliance on the Advance Ruling on similar fact delivered by various Authorities for Advance Ruling. (i) That in the case of Malankara Orthodox Syrian Church Medical Mission Hospital reported in 2021 (53) G.S.T.L. 434 (A.A.R-GST- Ker) it was held that: "The first question raised by the applicant is regarding the GST liability in respect of the supply of medicines, implants and other items to patients undergoing treatment as inpatients in different situations. In the situation specified in Question 1.1 above the applicant is offering a package to the inpatients covering the treatment including all required medicines and other supplies for a consolidated amount that is prefixed. In such cases the combination of goods and/or services included in the supply are naturally bundled in the ordinary course of business and hence it is a composite s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 hospital is exempted Also aded clarifications issued based on approval of 25th GST Council Meeting (F.No. 354/17/2018-TRU, dated 12-2-2018) that food supplied to inpatients as advised by doctor / nutritionist part of composite supply of health care and not separately taxable Same principle applicable in case of dispensing of medicine also - 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 Web services combined with such service are in the nature of incidental or ancillary services which help in better utility of main service then the various elements of the service are said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ruling, Kerala vide Order No. AAR/03/2018 dated 14.12.2018 (b) Advance Ruling Order No.KER/47/2019 dated 12.04.2019 in the case of M/s. Kindorama Health Care Pvt. Ltd. (c) Advance Ruling Order No.KER/57/2019 dated 05.09.2019 in the case of M/s. Baby Memorial Hospital Ltd. Thus the applicant is of the understanding that supply of food to in-patients admitted to the hospital for diagnosis or medical treatment or procedure is a component of the composite supply where the principal supply is healthcare services falling under SCS 999311 which is exempted as per entry at Sl. No. 74 of Services Exempt Notification No. 12/2017 Central Tax (Rate) dated: 28-06-2017 read with clarification of CBIC in Circular No.32/06/2018 - GST dated 12.02.2018 wherein it has been clarified that food supplied to the inpatients as advised by the doctor nutritionist is a part of composite supply of healthcare and not separately taxable. 6.3 WITH REGARD TO QUESTION NO. C i. The applicant submits that the term "Retention Money / charges" means those charges that are deducted by the Hospitals while making payment to Consultant Doctors & Technicians. Applicant invites consultant doctors wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness of patients with mental disorders as well as the mental health needs of those suffering from infectious and chronic diseases. This will lead to better health outcomes. Equipping students of nursing and psychologists with mental health skills promotes a more holistic approach to patient care and ensure both improved diction and prevention of mental disorders. iii. Thus, the applicant is of the understanding that training imparted to Nurses and Psychologists forms part and parcel of health care service. Hence GST is exempt on fees collected from Nurses and Psychologists. PERSONAL HEARING / PROCEEDINGS HELD ON 07.09.2023 7. Shri Mohammed Shabbir, GST Practitioner and duly authorised representative of the applicant appeared for personal hearing proceedings held on 07.09.2023 & reiterated the facts narrated in their application. FINDINGS & DISCUSSION 8. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and the KGST Act, 2017 are in pari-materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, 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; 12.1 The term 'clinical establishment' has been defined in para 2(s) of the above- mentioned notification as below: (s) "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 recognised 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; The Applicant is running a hospital and providing treatment to in-patients suffering from psychic disorder, substance use disorder, Neurology etc. The Applicant is a hospital hence, the same is covered under 'clinical establishment' as per the definition mentioned supra and since the hospital is providing treatment to in- patients suffering from psychic disord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice extended to the patients. Hence the room charges, medicines, consumables and food supplied in the course of providing treatment to the patients admitted in the hospital(in-patient) are undoubtedly naturally bundled in the ordinary course of business and the principal supply is health care service which is the predominant element of the composite supply. 13.2 Para 5(3) of Circular No. 32/06/2018-GST dated: 12-02-20218 clarifies about levy of GST on food supplied to the patients and the same is reproduced below: Sl. No. Issues Clarification 5. Is GST leviable in following cases: (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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exempt on fees collected from nurses and psychologists for imparting practical training. The Applicant states that they are providing practical training to nursing students and psychologists who are about to complete their course in recognised educational institutions. They allow trainee nurses and psychologists to interact with patients and try to understand the reason for their mental disorder and neurological illness. At the end of the training the Applicant conducts a test and issues certificate to all. The Applicant is of the understanding that training imparted to Nurses and Psychologists forms part of health care service and hence GST is exempt on fees collected from Nurses and Psychologists. The definition of 'healthcare services' is reproduced in para 12 supra. By going through the definition, we understand that to become a health care service, it should be a service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy. But here the Applicant is providing practical training to nursing students and psychologists and hence the same is not covered under healthcare services. 16. In view of the foregoing, we pass the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X
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