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2023 (1) TMI 433 - AAAR - GSTClassification of supply - supply of goods or supply of services - administering of COVID-19 vaccination by hospitals - administering of COVID-19 Vaccine by clinical establishments (Hospitals) - Healthcare services or not - HELD THAT:- In the instant case, there is no doubt that the applicant qualifies to be a clinical establishment but, the supply transaction is predominantly of sale of goods and not the service component of healthcare. The dominant intention of the recipient is the receipt of the vaccine followed by its administration and hence the principal supply is supply of vaccine and not the process of vaccination. The appellant himself acknowledges that the vaccine vial consists of multiple doses and one such dose is injected to the body of the recipient, as a part of the vaccination process. On the other hand he claims that there is no transfer of goods as such, which is a contradiction. This understanding of the appellant regarding vaccination process is flawed and distorted. The individual goes to the covid vaccination Center for the receipt of vaccine, by following the government guidelines of registering himself/herself in the portal and gets an appointment on a scheduled date to receive the vaccine, etc. Once the individual is vaccinated, there is transfer of goods undoubtedly, as the recipient receives the stipulated amount of dosage of medicine. Health Care Services are defined under 'Definitions' at (zg) of Notification No.12/2017 Central Tax (Rate) dt.28.06.2017. As per the definition, only diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy qualifies as “Health Care Services”. Needless to say, that when a person approaches a clinical establishment (hospital) for health care service like diagnosis/treatment/care for illness, injury, deformity, abnormality or pregnancy qualify for exemption under Entry 74 of Notification No. 12/2017 Central Tax (Rate) dt.28.06.2017. It is to also note that diagnosis/treatment/cure are services which are rendered by clinical establishments after being affected by disease - In the present case, the service rendered by the appellant is administration of Covid-19 vaccine which is also called Vaccination or Immunization - vaccination produces protection against disease and it is administered before the advent of disease. The discussed service of administering a vaccine does not fit into the definition of “Health Care Services” as per Notification No. 12/2017 Central Tax (Rate) dt.28.06.2017. The service of administering the vaccine has all the necessary elements to classify it as supply of goods and this has already been discussed supra. The outlet of supply or the supplier cannot decide whether a transaction can be classified as supply or not. There is transfer of medicine to the recipient when he approaches the Covid Vaccination Centre for vaccination, the recipient of vaccine makes a conscious choice of vaccine, and also pays a price for it as per the guidelines of the government - exemption is not allowed in the instant case against the claim of the applicant. While validating the decision of the lower authority that taxability of the supply comes under 'composite supply', wherein the principal supply is the 'sale of vaccine' and the auxiliary supply is the service of 'administering the vaccine' and the total transaction is taxable at the rate of principal supply i.e. 5%.
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