TMI Blog2020 (1) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... o be taken during treatment, implants and consumables used during their stay in the hospital - supply of medicines, implants and consumables are natural bundled with the supply of health services. In this case, supply of health services is the principal supply as that is the reason the in-patients get admitted to hospital instead of buying the medicines or consumables and using on themselves. Therefore, supply of medicines, consumables and implants to in patients in the course of their treatment is a composite supply of health services. The Inpatient services means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service comprises of medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services. A complete gamut of activities required for well-being of a patient and provided by a hospital under the direction of medical doctors is a composite supply of service and is covered under Inpatient services classifiable under SAC 999311 - Health care services provided by a clinical establishment or an author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital for diagnosis, or medical treatment or procedures would be considered as Composite Supply of health care services under GST and consequently can exemption under Notification No. 12/2017 read with Section 8(a) of GST be claimed? 2. Tax liability on medicines supplied to in-patients through pharmacy? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted the copy of Challans evidencing payment of Application Fees of ₹ 5,000/- each under Sub-rule (1) of Rule 104 of CGST Rules 2017 and SGST Rules 2017. 2.1 The Applicant has stated that Christian Medical College Vellore Association (CMC) is a non-profit organization governed by the Christian Medical College Vellore Association, registered under the Societies Registration Act XXI of 1860 and under Section 12AA of the Income Tax Act, 1961. Governance is through the represented members of the Association, headed by its officers. The primary concern of Christian Medical College, Vellore is to develop through education and training, compassionate, professionally excellent, ethically sound individuals who will go out as servant-leaders of health teams and healing communities. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al practitioner or para medics have been exempted vide Sl. No. 74, of Notification no. 12/2017-Central Tax (Rate) dated 28.06.2017. Vide clarifications issued based on the approval of 25th GST Council Meeting held on 18.01.2018 circular No.32/06/2018-GST, (F.No.354/17/2018-TRU Dt. 12.02.2018), it was clarified that food supplied to the inpatients as advised by the doctor/ nutritionist is a part of composite supply of health care and not separately taxable. 2.5 As per Authority of Advance ruling order No. KER/16/2018 Dt.19.09.2018 = 2018 (10) TMI 511 - AUTHORITY FOR ADVANCE RULINGS, KERALA , the following rulings are issued: The supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of composite supply of health care treatment and hence not separately taxable. The supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients is taxable. 3.1 The applicant was heard on 30.08.2019. The applicant appeared along with the authorized representatives. They submitted an in-patient discharge bill and the prescriptions given by doctor and the internal bill generated when in-pat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents on the questions raised by the applicant vide his letter Rc.A3.1226/2019 dated 26.08.2019, wherein he has stated that The supply of medicines and allied items provided by a hospital through pharmacy to in-patients is part of composite supply of health care treatment and hence not separately taxable The similar issue was ordered by GST AAR Kerala in respect of M/s. Ernakulam Medical Centre Pvt. Ltd. Advance Ruling No. Ker/ 16/2018/ 19.09.2018 = 2018 (10) TMI 511 - AUTHORITY FOR ADVANCE RULINGS, KERALA , wherein it is stated that Health care services provided by a clinical establishment, an authorized medical practitioner or para medics are exempted vide SL.No. 74 of Notification No. 12/2017-CT(Rate) dated:28.06.2017- Pharmacy is an outlet to dispense medicines or allied items based on prescriptions. Patients are admitted to a hospital only when they are extremely ill or have severe physical trauma. As far as an inpatient is concerned hospital is expected to provide lodging, care, medicine and food as part of treatment under supervision till discharge from the hospital. Inpatients receive medical facility as per the scheduled procedure and have strict restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supply means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; In the case at hand, the applicant being a hospital/ polyclinic undertakes services of diagnosis, treatment which comprises of providing bed/ ICU / room, nursing care, diagnostics including lab investigations and treatment surgical or otherwise under the directions of the Doctors. The hospital provides medicines, consumables, implants, etc. to the In-patients in the course of treatment on the directions of medical doctor for which the In-patient is billed together by the hospital. The hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be taken during treatment, implants and consumables used during their stay in the hospital. Only on using these medicines, consumable and implants as required and prescribed by the doctors and administered during their stay will the treatment be complete. Hence, supply of medic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Explanation to classification of services states: SAC 9993 Human Health and social care services 99931- Covers Human Health Services 999311 In patient 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. gynecological 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, Inpatient services means services provided by hospitals to inpatients und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncludes 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; From a joint reading of the Explanation of service pertaining to Inpatient services and the exemption above, it is evident that the exemption is applicable to a Clinical Establishment , when services by way of diagnosis or treatment or care for illness, etc. are undertaken by such establishment under the directions of a medical doctor. The applicant hospital is a Clinical Establishment and for the health care services as defined in the Notification above provided including the supply of medicines, implants and consumables, they are exempt under Sl 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. 7. In view of the foregoing, we rule as under: RULING 1. Medicines, drugs, stents, consumables and implants used in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X
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