TMI Blog2021 (4) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Reliance can be placed in the case of IN RE: M/S. TERNA PUBLIC CHARITABLE TRUST [ 2019 (7) TMI 1331 - AUTHORITY FOR ADVANCE RULING, MAHARASHTRA] where it was held that The supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through the hospital owned pharmacy, as well as food, room on rent to the in-patients is part of composite supply of health care treatment and hence not taxable under GST Laws. - GUJ/GAAR/R/11/2021 - - - Dated:- 20-1-2021 - SANJAY SAXENA AND MOHIT AGRAWAL, MEMBER Present for the applicant : Shri Manan Shah CA and Viral Shah -Manager BRIEF FACTS: M/s Shalby Limited, Shalby Hospital, Opp Karnavati Club, S.G. Highway, Ahmedabad-380015 having a GSTIN: 24A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 inpatients, themselves prescribe the medicines and consumables and implants which are used in their treatment and diagnostics. The in-patients are charged for all of these when they are admitted to the hospital which provides services to the in patients. 7. The applicant submitted that Hospital does not enter into contracts with patient for supply of medicines / implants / consumables etc. The patient wishes to be cured of his illness and hospital offers a package / healthcare services for the medical treatment required for curing the patient. Therefore, the agreement is as such for treatment of disease or illness and not for supply of goods i.e. Implant, medicines, surgical and medical consumable etc. Hospitals and patients-do not have object to sell or purchase of Implant, medicines, surgical and medical consumable used during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om, 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 completed. Hence, 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 the In-patients in the course of their treatment is a composite supply of health services. The term composite supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt. (3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 11. The applicant submitted : The Explanation to classification of services states: SAC 9993 Human Health and social care services 99931- Covers Human Health Services 999311 Inpatient 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. gynaecological 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 heal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , deformity, abnormality or pregnancy in any recognized system of medicines in India or a place established as an independent entity qr a part of an establishment to cany 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, 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 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; The applicant states that from a joint reading of the Explanation of service pertaining to In-patient 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 ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 SI. No. 74 of the above notification. 15. The Applicant relied on the following decisions of various Authority for Advance Ruling- where the supply of 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 and other services 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 in-patient 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 SI. No. 74 of notification. The details list is as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling as well as at the time of personal hearing and the applicable provisions of the GST Laws in this regard. At the outset, we would like to state that the provisions of both the CGST Act and the GGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provisions under the GGST Act. 20. The applicant submitted that M/s. Shalby Limited, established by Dr. Vikram I. Shah in 1994 in Ahmedabad, Gujarat, operates a chain of multispecialty hospitals across India. They are one of India s leading Multi-specialty, corporate healthcare providers having presence across Central and Western part of India. They are in forefront of providing pioneering, qualitative medical services at affordable costs within its home base - Gujarat and have full- fledged hospitals at Ahmedabad, Surat and Vapi. 21. The applicant is a multi-specialty hospital and 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 require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 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 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 the In-patients in the course of their treatment is a composite supply of health services. 23.1 This view is strengthened by the Circular No.32/06/2018-GST dated 12.02.2018 , which is reproduced below: Sr. No. Issue Clarification 5 Is GST leviable in following cases: (1) --------- (2) Retention money: Hospitals charge the patients, say, ₹ 10000/- and pay to the consultants/ technicians only ₹ 7500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 23.3 Health care services provided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide Sl. No 74 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncluding the supply of medicines, implants and consumables, rooms, food etc. they are exempt under Sl. No 74 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017. 23.4 We also agree with the applicant s contention that room rent for patients in hospital is exempted in terms of Circular No.27/01/2018-GST dated 04.01.2018 and the 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. Their reference to the clarifications issued vide Circular No.32/06/2018-GSTdated 12.02.2018 based on the approval of 25th GST Council Meeting held on 18-01-2018 [F.No.354/17/2018-TRU Dt.12-02-2018], is proper. The relevant text of the Circular No. 27 /01/2018-GST dated 4.1.2018, which amply clarifies that room rent, is exempted under Notn. No. 22/2017 CT(Rate), is reproduced under for ease of reference: S.No. Questions/Clarifications sought Clarifications 4 1. Whether for the purpose of entries at Sl. Nos. 34(ii) [admission to cinema] and 7(ii)(vi)(viii) [Accommodation in hotels, inns, etc.], of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... medical facility as per scheduled procedure and have strict restriction to ensure quality/quantity of items for consumption, medicines or allied goods supplied to them is a composite supply under health care services and hence exempt from GST - However, as regards supply of medicines and allied items to outdoor patients is concerned same is an independent supply because such patients are not bound to procure these items from hospital pharmacy - These supplies are, therefore, taxable - Service Accounting Code (SAC) No. 9993. [paras 4, 5, 6, 7] b) In the case of M/s. KIMS Healthcare Management Ltd. Advance Ruling No. KER/17/2018 Dt. 20.10.2018 Authority of Advance Ruling, Kerala reported in ELT 2018 (18) GSTL 831 (AAR-GST ) has held that, Composite supply - Health care services - Medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment hospital or clinical establishment - Indispensable items of treatment and naturally bundled in ordinary course of business with health care services - Clarification in C.B.I. C. Circular No. 27/01/2018-GST, dated 4-1-2018 that room rent in hospital is exempted - Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) GSTL 809 (AAR-GST) has held that, Composite services - Health Care services - Supply of medicines, consumables, surgical items, items such as needles, reagents, etc. used in laboratory, room rent used in course of providing Health Care services to in-patients for diagnosis or treatments - In-patient under continuous monitoring of doctors and nursing staff and administration and dosage of medication all under control of doctor and nursing staff - Entire treatment protocol is documented and recorded - Invoice or bill raised for treatment as in-patient being a single bill charging for all facilities or services utilized for treatment in hospital - Supply naturally bundled and provided in conjunction with each other, would be considered as Composite Supply - In case of in-patient, hospital provides bundle of supplies classifiable under Health Care services eligible for exemption under Serial No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 2(30) of Central Goods and Services Tax Act, 2017. [paras 5, 6, 7, 9] f) Kindorama Healthcare (P.) Ltd., advance ruling no. ker/47/2019 APRIL 12, 2019 Authority of Advance Ruling, Kerala reported in ELT 2019 (24) GSTL 804 (AAR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undled with main supply of Health Care services under supervision/direction of medical expert, entire supply is a composite supply with principal supply of Health Care Services in terms of C.B.I. C. Circular No. 32/06/2018-GST, dated 12-2-2018 - Said service is appropriately classifiable as in-patient services under SAC 999311 of Tariff - Further, since aforesaid service is being supplied by a clinical establishment, same is fully exempt vide S. No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 8 of Central Goods and Services Tax Act, 2017. [paras 5.1, 5.2, 5.3, 5.4] i) Terna Public Charitable Trust order no. GST-ARA-135/2018-19/B-55 May 21, 2019 Authority of Advance Ruling, Maharashtra reported in ELT 2019 (27) GSTL 421 (AAR-GST) has held that, Health care treatment - Supply of medicines, surgical items, implants, consumables and other allied items provided by hospital through hospital owned pharmacy, as well as food, room on rent to the inpatients - Part of composite supply of health care treatment - Exemption under Serial No. 74, Heading No. 9993 of Notification No. 12/2017-C.T. (Rate) to services provided by way of Health Care services by a clinical estab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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