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2020 (7) TMI 380 - AAR - GSTLiability of GST - medicines supplied to In-patients through pharmacy - medicines, drugs, stents, implants etc administered to in-patients during the medical treatment or procedure - HELD THAT:- Applicant renders health care services to in-patients in the form of supply of medicines, drugs, stents, implants etc being administered during the medical treatment or procedure - Primarily the health care services provided by the applicant are exempt under Sl.No. 74 Heading 9993 vide Notification No 12/2017 - Central Tax (Rate) Date: 28.06.2017. The health care services as explained in (zg) of para 2 of Notification no. 12/2017 - Central Tax (Rate) Date: 28.06.2017, defines service by way of diagnosis, or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India. In common parlance, when one looks into the definition, 'the treatment or care' extended by hospital can be thought of devoid of medicines, relevant consumable, or implants, by no stretch of imagination. The supply of medicines and the consumables are integral part of the treatment extended to the in-patients by the hospital - the services rendered by the applicant is a composite supply as defined under section 2(30) of CGST Act, 2017 in which the principal supply is health care, being predominant and the supply of medicines, drugs, implants, stents, and other consumables, come under ancillary supplies and accordingly tax liability has to be determined under section 8 of CGST Act, 2017. Even the Circular No.32/06/2018-GST (F.No.354/17/2018-TRU) date: 12.02.2018 released on the approval of the CGST council 25th meeting clarifies the issue on the similar lines stating that the food supplied to in-patients is part of composite supply of health care and not separately taxable, whereas other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable - the same principle is applicable to the medicines, drugs, stents, implants etc administered to in-patients during the medical treatment or procedure. Thus, the supply of medicines supplied to In-patients through pharmacy are not liable to tax, being a part of the composite supply of health care services under SI.No. 74 Heading 9993 vide Notification No 12/2017 - Central Tax(Rate) Date: 28.06.2017 which are nil rated - medicines, drugs, stents, implants etc administered to in-patients during the medical treatment or procedure are not liable to tax.
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