TMI Blog2022 (8) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... oused in rooms, the room charges of which do not exceed Rs. 5000/- per day. The applicant hospital is a Clinical Establishment and for the health care services provided as defined in the Notification above to in-patients from admission till discharge 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 Sl No 74 of Notification No.II (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017 upto 17.07.2017; and subsequent to amendment, effective from 18.07.2022, the exemption is applicable for the health care services provided by them to in-patients only when the room - If the room charges exceeds Rs. 5000/- per day then the applicable rate of tax for the health care services is 5% [2.5% CGST 2.5 % SGST] as per entry No. 31A of the Notification 11/2017 CT(rate) dated 28.06.2017 amended vide notification 03/2022 Ct(rate) dated 13.07.2022 w.e.f 18.07.2022, subject to the conditions specified in Column(5) of the entry. Whether the supply of medicines drugs and other surgical goods used in the course of providing health care services to out-patients by pharmacy unit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply with Healthcare being the principal supply and they are exempt under S1 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 as amended, while the mobility aids, prosthetics being in the nature of individual supplies are not part of the 'Composite supply' of 'Health Care services' - the Supply of medicines and consumables used in the course of providing health care services to In-patients by pharmacy unit of Kumaran Medical Center for diagnosis or treatment during the patients admission in hospital till discharge is to be considered as Composite Supply of health care service under GST and consequently exemption under Notification No.12/2017- CT (Rate) read with Section 8(a) of GST is available for such supplies. - TN/29/ARA/2022 - - - Dated:- 29-7-2022 - SHRI T.G. VENKATESH, I.R.S., TMT. K. LATHA., M.SC., (AGRI), MEMBER Note: Any appeal against the Advance Ruling order shall be filed before the Tamil Nadu State Appellate Authority for Advance Ruling, Chennai under Sub-section (1) of Section 100 of CGST ACT/TNGST Act 2017 within 30 day ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to provide healthcare services the applicant also maintains Pharmacy, Clinical Laboratory, X-Ray Scanning facility, Ambulance Services, Dietary Services etc. The applicant has stated that they have categorized the Patients as Out-Patients and In-Patients for their convenience; The Out-Patients are those who visit the Hospital for Routine check-ups, clinical visits and the Hospital provides diagnosis to them. Medicines are prescribed to them as part of treatment. Whereas the In-Patients are those who are admitted to the hospital for the required treatment. They are provided with stay facilities, dietary food for the treatment. They are also provided with medicines, drugs, stents, implants, other surgeries/ procedures etc. as incidental to the Health Care Services rendered in the hospital. 2.2 The applicant has three different procurement mechanisms for the patient's need where separate accounting records are maintained General Store: Procures stocks of implants, Stents (Charged for In-patients), Surgical hygiene consumables (charged as CSSD for In-patients as well as emergency out-patients) KMC Pharma: Procures and Supplies Medicines for In-Patients in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which constitutes the predominant element of a composite supply and any other supply forming part of that composite supply as ancillary. Further in reference to Fees and other charges charged by the hospital in regards to ancillary charges, nursing care, infrastructure facilities, paramedic care, emergency services and Food supplied to patients, the applicant has placed reliance on the Circular No: 32/6/2018-GST dated 12.02.2018 wherein it is clarified that they would form part of composite supply for Health Care Services. 2.4 The applicants interpretation of law in respect of the questions raised in their Advance Ruling Application is as below: In respect of Q.No.1 - As far as an in-patients are concerned, hospital is expected to provide continued care to the patients by regular doctor visits, duty doctor consultation, Nursing, supply of patient food and other periodical tests wherever required till the time of discharge of the said patient. The patients are expected to undertake supplement of medicines as well as relevant consumables as required to make sure that an appropriate diagnosis and the best possible treatment is provided for. Only on administering these medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the due course of diagnosis and treatment to be treated as a composite supply to facilitate health care services. Therefore the Petitioner is of the view that these supplies are also exempt vide SI. No 74 of Notification No.12/2017 CT (rate) dated 28.06.2017. 3.1 The applicant was addressed through the Email Address mentioned in the application to seek their willingness to participate in a virtual Personal Hearing in Digital media. The applicant consented and the hearing was held on 29.4.2022. The Authorised Representative Shri. Shankesh Jain, (Manager N.RAKESH JAIN Co.) appeared for the hearing and reiterated the submissions made. The applicant was asked to furnish the following documents: i. Documents supporting full sequence of admissions, diagnosis, treatments and discharge along with the billing for same for a sample in-patient. ii. Documents supporting the full sequence of treatment ex-tended to the Out-patients along with supporting billing. iii. Trial balance and statement of accounts for the hospital, pharmacy and general store. iv. Practice followed with supporting bills/invoices prior to January 2021 and after January 2021. v. Docume ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of providing health care services to in-patients for diagnosis or treatment for patient opting with or without packages along with allied services i.e. (room rent/food/doctor fees Etc.) provided by hospital is a Composite Supply . Supply of in-patient health care services by the hospitals as defined in para 2 (zg) of the Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended, is exempted from CGST as per SI. No. 74 of the above notification. Q.No.2 -Remarks: The supply of inpatient health care services by the hospital as defined in Para 2 (zg) of the Notification No. 12/2017-Central Tax(Rate) dated 28.06.2017, as amended, is exempted from CGST as per Sl. No. 74 of the above notification. Hence the supply made to out-patients is taxable. Q.No.3 -Remarks: In this regard, I submit that pacemakers, steel plate for fractures, coronary stunts are not used for making appropriate diagnosis or for giving the best possible treatment. They come into use only after diagnosing the disease. Further purchasing the mobility aids like wheel chairs, crutches and walkers, are at the discretion of the patients. They can procure these aids from outside al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the hospital for routine checkups, clinical visits and the hospital provides diagnosis to them. Medicines are prescribed to them as part of treatment. 8.1 The health care services rendered to In-patients is first taken up for discussion. On perusal of documents/details submitted by the applicant, it is observed that in-patients (generally requiring care and treatment in excess of 24 hours) are provided with stay facilities, medicines, consumables and other surgeries/procedures required for the treatment. From the In-patient detailed bill and related bills furnished by the applicant in respect of sample in-patient:UHID:KMC21/36265, it is seen that, in case of in-patients the detailed bill includes Consultation charges, file charges, Lab profile test charges, duty doctor charges, bed charges, nursing charges, food charges, procedure fees, maintenance charges (ward), admission charges, Pharmacy charges, etc. From the pharmacy bill enclosed with the detailed bill, it is evident that the medicines, consumables, etc are procured from IP pharmacy for administering the same to in-patient and such medicines are billed without any discount, i.e., at MRP. It is seen that in patients are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, In-patient services includes services provided by hospitals to in-patients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service comprises of medical, pharmaceutica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ablishment 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 a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases. And 'health care services is defined under 2(zg) as: (2g) health care services moans any service by way of diagnosis or treatment or care for illness. injury; deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way 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; 8.5 From a joint reading of the the exemption entry above and the definition of 'health care services' 'clinical establishments' it is evident that the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the patients are not mandated to buy from the hospital pharmacy only. They have the freedom to either buy from the hospital pharmacy or other pharmacies of their choice unlike in-patients, where the medicines and consumables are issued by the hospital pharmacy to ensure proper treatment. 9.2 On scrutiny of the bills and invoices submitted by the applicant, it is observed that a Cash Bill is raised for consultation and the pharmacy bill is separately raised. This proves that the consultation and supply of medicines are not naturally bundled and hence the supply of healthcare and the supply of medicines are independent supplies, not naturally bundled and therefore cannot be considered as a 'composite supply'. 9.3 In the case of in-patients, the hospital is expected to provide provide lodging, care, medicine and food as part of treatment under supervision till discharge from the hospital. But in the case of out-patients, there is no such expectation on the hospital and the out-patient just walks in for consultation and advice. Hence it is clear that the supply of medicines and consumables and Service of consultation of out-patients is not inextricably linked and not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upply of `Health Care Services'. The mobility aids are extended only temporarily and as such the supply of such goods cannot be termed to be naturally bundled with supply of healthcare service by a clinical establishment. Hence, the mobility aids, prosthetics which are in the nature of capable of bought and sold separately and which are not naturally bundled with the provision of treatment of patient in the clinical establishment is liable to GST as individual supply of goods. Thus, the supply of implants which are fitted in the body by a surgical procedure in the course of diagnosis and treatment of illness for in-patients would fall under the ambit of Composite Supply with Healthcare being the principal supply and they are exempt under S1 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 as amended, while the mobility aids, prosthetics being in the nature of individual supplies are not part of the 'Composite supply' of 'Health Care services'. 11. To sum up, the Supply of medicines and consumables used in the course of providing health care ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
