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2019 (7) TMI 1331 - AAR - GSTClassification of supply - Composite supply or not - supply of healthcare treatment - supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy, as well as food, room on rent to the in-patients - supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy to the out-patients. Whether the supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy, as well as food, room on rent to the in-patients is part of composite supply of health care treatment; and hence not taxable under CGST/SGST? - HELD THAT:- In-house patients are patients are admitted by the hospital to receive treatment from disease, illness, etc. Such patients are provided with stay facilities, medicines, consumables, implants, dietary food and other surgery items required for treatment. These patients receive medical facility as per the scheduled procedure and have strict restriction to ensure, quality/quantity of items for consumption. These in-patients are provided medicines, implants, surgical items and other allied items, dietary food advised by nutritionist etc. During the course of such treatment after admission in to the hospital they are also provided rooms on rent. Hence such patients live in the hospital“ during the course of provision of healthcare services by hospital to the to the patients admitted for diagnosis or treatment in hospital. There is no doubt that the supply of medicines, consumable, implants and allied items provided by the hospital through the pharmacy, as well as food, room on rent to the in-patients is part of composite supply of health care treatment - the subject hospital is considered as a clinical establishment under the GST Laws and since it is providing health care services, such services are exempt in view of Sr. No. 74 mentioned above, The entire supply of services by the hospital, like supply of medicines, surgical items, implants, consumables and other allied items, treatment procedures, diagnostic procedures, supply of food to patients, room on rent to the in-patients is part of composite supply of health care treatment. The supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy, as well as food, room on rent to the in-patients is part of composite supply of health care treatment and hence not taxable under GST Laws. Whether the supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy to the out-patients, is part of composite supply of health care treatment; and hence not taxable under CGST/SGST? - HELD THAT:- The pharmacy run by hospital dispensing medicine to outpatients or bye standers or others can be treated as individual supply of medicine and it is not complete full chain of treatment activity as given to the admitted inpatients for the specific illness by the Doctors or Hospitals. There is major differences are found in connection with in patient and out patients. Hence the criteria given in Sr. No. 74 of Notification No. 12/2017 is not satisfied. Hence sale to out-patients by the pharmacy located in the hospital is not covered under the ambit of health care services. Hence, such supply of medicine and allied goods are taxable. Further, Board’s circular also has not considered that such services given to the OPD patients by the Hospitals would be covered under part of composite supply of health care. The transaction is not covered under composite supply, and is therefore out of purview of the Sr.No.74 mentioned above and GST is liable to be paid on such sale effected by the pharmacy.
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