9911796707
TMI Blog2021 (3) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... dedicated 10 Cardio ICU beds * The unit is NABH Accredited * Key Specialties of this unit: Cardiology, Orthopedics, Laparoscopy, * Gynecology, Ophthalmology, General Surgery, General Medicine, * Oncology, Neurology & Critical Care & other speciality services * No of Consultants / Doctors: More than 100 (including visiting) * No. of Operational Beds: 120 Surat Hospital: * Largest Corporate Multi-Specialty Hospital in Surat was operationalized in 2014. * This unit is having dedicated Cardiac Unit with 'State of Art' Cath-Lab * The unit is NABH Accredited * Key Specialties: Cardiology, Orthopedics, Joint Replacement, Arthroplasty, Gastroenterology, Gynecology, General Surgery, General Medicine & Critical Care & other speciality services * No of Consultants / Doctors: More than 100 (including visiting) * No. of Operational Beds: 150 Baroda Hospital: * Promoter doctors started practice from this unit in 1988 * Strong Brand Equity with Goodwill of > 25 years * Renowned for Orthopedic, General Surgery, Ophthalmology and Gynecology & other speciality services * Equipped with OTs: 3, OPD Chambers: 4, Digital X-Ray * No of Consultants / Doctors: Arou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors and is one of the fastest growing chains of multispecialty hospitals in South Gujarat. * Delivering a wide-ranging array of medical services, we offer inpatient, outpatient, day care treatment, Surgery, emergency & trauma care in the surroundings. * There are various specialty and super-specialty departments within the hospital. All these departments run daily. At any given time of the day, the patient can meet the specialist doctor and seek advice. The doctors are eminent practitioners who have a standing with the community. * Medications being an integral part of therapy, the statutory regulations for scheduled drugs, quality, storage and administration are considered vital parameters for treatment. The mission of the pharmacy is to provide medications, other health care products, relevant information, professional services and to help people and society to make the best use of them. Every activity in the pharmacy is done with certain system and confidence, in order to give right touch of professionalism and care. The hospital has full-fledged pharmacy manned by licensed Pharmacists, which operate round the clock. Medicines are procured from standard companies and fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. * The hospital owns and runs a pharmacy. During the course of treating the in-house patients admitted in the hospital medicines, surgical items, implants, consumables and allied items are used. For proper care and watch by doctors/ nurses a room on rent and food from hospital canteen are provided to the in-house patients as a part of overall health care. * Medicine or allied goods dispensed to inpatient are essential items and your Applicant believes it to be a composite supply to facilitate health care services. Hence, the medicines dispensed to inpatients are incidental to the health care services rendered to the patient by the hospital. The Applicant believes that the healthcare services provided by hospital are exempt vide Notification No. 12/2017-CT(Rate) dated 28.06.2017 (Sl. No. 74) and, hence, considering that the medicines dispensed during the treatment is an extricable part of healthcare treatment, it should be considered exempt. The pharmacy/consumables are dispensed to inpatients on the basis of prescription given by admitting doctors and IP Medicine dispense slip is issued to the inpatients for their record/claim purpose. (Ref: PM2019-20/406471 dated 20/11/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2017-Central Tax (Rate) dated 28th June, 2017. (Copy of Relevant portion of the notification is enclosed) * Further, the Government of India vide Circular No.27/01/2018-GST dated 04/01/2018 has clarified that room rent in hospital is exempted. (Copy of the said circular is enclosed herewith) * Further, the clarifications issued based on the approval of 25thGST Council Meeting held on 18-01-2018 [F.No.354/17/2018-TRU Dt.12-02-2018], clarifying that food supplied to the in-patients, as advised by the doctor/nutritionist, is a part of composite supply of health care and not separately taxable. (Copy of the said clarification is attached) * The Applicant is of the view that the medicines, surgical items, implants, consumables and allied items supplied through hospital owned pharmacy to inpatients under the prescription of the doctors are incidental to the health care services rendered in the hospital and beyond the ambit of taxation being health care services being composite supply. Food supplied, room provided on rent to in-house patients, and other allied services provided during the course of treatment to Inpatient is also, according to the applicant, composite supply of healt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the proposed activity of the Applicant and, hence, the applicant craves a leave for non - submission of any agreement as being asked for at the time of personal hearing. But the Ruling is quite essential to know the taxability of the same as the same is being proposed to be carried out by the Applicant. (iii) As regard the Nature of OHC services, they submitted that the companies operating in different sector consists of diverse industries producing different products and services. Many of such industries have machinery & objects that are harmful to individuals if exposed for a longer period of time, hence, it is important to screen all workers for occupational intervals. (iv) Some hazards are common for all industries like Hazardous substances, Dust, Machinery related accidents, trips, and falls, Physically demanding work, Heat and cold, etc. (v) The best way to avoid any accident to happen is to have preventive & safety processes in place & get an individual's health check done regularly. ln many companies, it is becoming mandatory to have a Pre-employment health check-up done even before hiring an employee. (vi) Thus, occupational health checks can be required fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic; or (ii) to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospitals, nursing home or multi- specialty clinic." (x) Subsequently in exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, on being satisfied that it is necessary in the public interest so to do, the Central Government exempted the taxable service referred to in sub-clause (zzzzo) of clause (105) of section 65 of the Finance Act, from the whole of the service tax leviable thereon under section 66 of the said Act vide Notification No. 30/2011Service Tax dated 25thApril, 2011. Since the date of granting of the said exemption by the Government, the Hospitals are not required to levy / pay service tax on the said activity being carried out by them. (xi) Even with the introduction of Negative List in the Service Tax regime, Sr. No.2 of Notification No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12, health care services rendered by clinical establishments are totally exempt as provided herein above. ln such circumstances, the Appellant believes that if the answer to this question is answered in negative it will defeat the entire purpose of granting exemption to the Health Care Services. Even when the contract is proposed to be made with a Corporate Entity for carrying our medical check-up of their employees, the nature of activity is not going to be changed and should equally be treated at par with Health Care services provided in Clinical Establishment as the place of rendering services is not vital. Thus, the words 'diagnosis,' and 'care' under the Healthcare service under Entry No.74 of Notification No. 12/2017 are broad enough to include the Occupational Health Check Up Facilities as well which are provided by a clinical establishment, an authorised medical practitioner or para-medical staff. (xv) Hence, the Applicant prayed this authority to support the belief of the Applicant by answering the second question in affirmative on the basis of legal provisions of the law and belief presented herein above by the Applicant. DISCUSSION & FINDINGS: 5. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m on rent, other services to the in-patients is part of composite supply of health care treatment; and hence not taxable under CGST/SGST? 7.1 The applicant has a multi-specialty hospital providing health care services to both out-patients and in-patients. The in-patients are provided with stay facilities, medicines, consumables, surgical implants, dietary food and other surgery items required for treatment. During the course of such treatment after admission into the hospital, the in-patients are also provided rooms on rent. It is, thus, seen that in patients are provided a comprehensive treatment which includes room, nursing care, medicines, consumables, implants etc. The doctors, who treat the in patients, themselves prescribe the medicines and consumables and implants which are used in their treatment and diagnostics. The inpatients are charged for all of these when they are admitted to the hospital which provides services to the in patients. 7.2 Section 2(30) of CGST ACT and SGST ACT states: (30) "composite 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable on such money retained by the hospitals? (3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST. Health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt. [Sl. No. 74 of notification No. 12/2017CT(Rate) dated 28.06.2017 as amended refers]. (1) ------------. (2) Healthcare services have been defined to mean any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India[para 2(zg) of notification No. 12/2017-CT(Rate)]. Therefore, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.06.2017 as amended. For ease of reference, the relevant entry is given below: SI.No. Chapter, Section, Heading. Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 74 Heading 9993 Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or par-medics. (b) services provided by away of transportation of a patient in an ambulance, other than those specified in (a) above. Nil Nil "Clinical establishment" is defined in the said notification under 2(s), which states that "Clinical Establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases. And 'health care services" is defined under 2(zg) as: (zg) "health care services" means any services by way of diagnosis or treatment or care for illness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? 1. Price/declared tariff does not include taxes. 2. Room rent in hospitals is exempt. 3. Any service by way of serving of food or drinks including by a bakery qualifies under section 10(1)(b) of CGST Act and hence GST rate of composition levy for the same would be 5%. 8. In view of the above, we hold that medicines, surgical items, implants, consumables and other allied items provided by the hospital through their hospital in house pharmacy used in the course of providing health care services as well as supply of food and room on rent to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply of In Patient Healthcare Service. Supply of inpatient health care services by the applicant hospital as defined in Para 2(zg) of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017, as amended, is exempted from CGST as per Sl. No. 74 of the above notification. 9. Now, we take up 2nd question for discussion, as below:- Question No. 2: Whether the supply of Occupational Health Check-up service (OHC) by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital's payroll working in different corporate for pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9; and 'care' under the Healthcare service under Entry No.74 of Notification No.12/2017-CT (Rate) are broad enough to include the Occupational Health Check Up Facilities as well which are provided by a clinical establishment, an authorised medical practitioner or para-medical staff. 14. Now, we examine as to whether the above services of the Occupational Health Check Up Facilities provided to business entities are covered under Sr. No.74, Heading No. 9993 of Notification No.12/2017-CT(Rate) dated 28.06.2017, which exempts services provided by way of health care services by a clinical establishment, an authorised medical practitioner or para-medics. 15. For better understanding the exemption, we need to understand the term "Health care services" used in the said notification. The said notification defines Health Care services as under: (zg) "health care services" means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties are by no stretch of imagination covered under the scope of 'healthcare services' as defined above. Thus, the "health care services" do not include the services of the Occupational Health Check Up Facilities, which is commonly known as corporate health check-up schemes, provided to business entities by the applicant as same are provided in order to detect any medical indicator or to ensure timely diagnosis of any disease so that prophylactic measures can be taken. Said Corporate health check-up services are not provided for diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy of any patient. Health check-up is being undertaken in routine of the healthy Persons just to keep their employees fit and healthy in future. Payment thereof is being made by the business entities who have engaged the applicant for said services and not by the person concern whose health check-up is being carried out by the applicant. Thus, said services are being provided to the business entities and not to any patient. Hence, same are not covered under exempted "Health care services". 16. In view of the above, we hold that the applicant will be liable to pay GST @ 18% ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
