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2019 (3) TMI 757 - AAAR - GSTClassification of supply - composite supply or not - supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients - medicines and allied items provided by the hospital through the pharmacy to the out-patients - taxability. Supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients - Held that:- On analyzing the case sheet and invoices raised in case of an inpatient, it can be seen that during the period of admission in the hospital, the patient is under continuous monitoring of the doctors and nursing staff and administration and dosage of medication is all under the control of the doctor and the nursing staff. The entire treatment protocol is documented and recorded. The invoice/bill raised for the treatment as an inpatient is a single bill Charging for all the facilities/ services utilized for the treatment in the hospital including room rent, nursing care charges, laboratory, consumables, medicines, equipment charges, doctor's fee, etc. Thus, it is clear that in case of an inpatients the hospital has provided a bundle of supplies which is classifiable under h care services. Supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients - Held that:- On analysis of the case sheet and the invoices raised in respect of an outpatient, it can be seen that even though the invoice is named as "OP SERVICES-CASH”, the invoice is raised only for supply of medicines and no consultation charges are seen raised in the invoice. Thus, in case of outpatient. the doctor's consultation and supply of medicines are not bundled together - In case of outpatients, it is the choice of the patient whether to follow the medical advice given by the doctor or not. Neither the hospital nor the consulting doctors can coerce the patient to follow the medical advice given by the doctor. Thus, in certainty, it can be established that the medical care other than the doctor's consultation is outside the control of the hospital. Neither the consulting doctor nor the hospital has any control on the patienes medical care. In case of outpatients, the health care service provided by the hospital is restricted to the consultation of the doctor. These are not naturally bundled together to be considered as composite supply. Even if the outpatients decide to buy the medicines from the pharmacy run by the hospital, the charges for supply of medicines is billed separately and cannot be considered as composite supply to extend the exemption and hence supply of medicines and allied items to outpatients is liable to GST being a taxable supply. The supply of medicines and allied items to the outpatients through the pharmacy attached to the hospital run by the appellant is taxable under GST.
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