TMI Blog2021 (11) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... to cast an obligation upon it to comply with the provisions of Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017 in totality? - HELD THAT:- The activities of the applicant which includes medical education services are covered under the scope of the term business . In fact, Education Services are classified under Service and Accounting Code (SAC) 9992 and considered to be a supply of services. Since the applicant's supply of medical education services are also considered to be business there is definitely an obligation cast upon it to comply with the provisions of CGST Act, 2017 and the MGST Act, 2017 - with only respect to the medical education services, as is asked in the Question, the applicant may not comply with the provisions of CGST Act, 2017 and the MGST Act, 2017, since the applicant being an educational institution, is providing medical education services as a part of a curriculum for obtaining a qualification recognized by any law (in this case the qualification is recognized by the Nagpur University) for the time being in force the said supply would be exempt under the GST Laws (Sr. No. 66 of Notification No. 12/2017-Central T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able. Hence we do not discuss the classification entry of such fees and other charges received. The charges recovered from OPD patients are exempt from tax - it is noticed than the applicant has asked Whether the nominal charges received from patients (who is an essential clinical materials for education laboratory) towards an Unparallel Health Insurance Scheme to retain their flow at one end for the purpose of imparting medical education as a result to provide them the benefit of concessional rates for investigations and treatment at other end would fall within the meaning of supply eligible for exemption under the category of educational and/or health care' services . It is admitted fact that the applicant provides renting and other services as discussed in this question and collects certain amounts towards provision of said services. What is the object of provision of said service, would not alter the basic nature of provision of any service. Each service or group of services, provided has to be looked into separately with regard to schedule entries, as per the scheme of the act - The service of supply of food to non-in-house-patients and those who are not employe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lth care services? - HELD THAT:- The receipt on account of rent is taxable at 18% as discussed above. It is further clarified that the food supplied to the in-patients as advised by the doctor/nutritionists, as well as supply to employees and staff of the applicant; from such canteen, is a part of composite supply of healthcare and is not taxable. But the other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable at 5%. - GST-ARA-120/2018-19/B-90 - - - Dated:- 10-11-2021 - SHRI. RAJIV MAGOO, AND SHRI. T. R. RAMNANI, MEMBER PROCEEDINGS (Under Section 98 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017) The present application has been filed under Section 97 of the Central Goods and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act, 2017 [hereinafter referred to as the CGST Act and MGST Act ] by M/s. KASTURBA HEALTH SOCIETY , the applicant, seeking an advance ruling in respect of the following questions. Whether the applicant, a Charitable Society having the main object and factually engaged in imparting Medical Education, satisfying al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of supply eligible for exemption under the category of educational and/or health care services. d. Whether the nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, and Refreshment which are support activities for attainment of main activities and further amount received on account of disposal of wastage would fall within the meaning of supply qualifying for exemption under the category of educational and/or health care services. At the outset, we would like to make it clear that the provisions of both the CGST Act and the MGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to any dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the MGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, the expression 'GST Act' would mean CGST Act and MGST Act. 2. FACTS OF THE CASE: 2.1 The applicant filed application for Advance Ruling on 04.02.2019 in respect of the questions mentioned above. The Advance Ruling application was disposed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12.02.2018 (Sr. No. 5), it is observed that the services rendered by an educational institution to its students, faculty and staff etc. and the health care services provided by a clinical establishment, an authorised medical practitioner or Para-medics are exempted from payment of GST. However, as per above mentioned circular it is clarified that the food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable but other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 3.2 Question No. 2 (Comments):- As per the above mentioned notifications and circulars it is noticed that the services rendered by an educational institution to its students, faculty and staff etc. and the health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt from payment of GST. While services provided by an educational Institution are out of the GST ambit, the same is not the case with services provided to an educational institution. The GST exemption on services provided to an educational institutio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government @25 % and remaining 25% is derived as IRG in form of Fess from students and Nominal Charges from Patients. 4.3 The applicant society since solely engaged in Education and there being no business activity was not obliged to get registered under the erstwhile Bombay Sales Act, 1959, MVAT Act, 2002 as well as Service Tax Act, on account of specific exclusions therein. 4.4 After introduction of GST applicant's Suppliers, Vendors, Transporters and Service Providers were pressurising Applicant to provide it's GST Registration Number and without such number even transporters were not ready to carry the essential material needed for hospital. Therefore, in order to overcome these issues, the society has applied for voluntary registration and got registered with effect from 21st July 2017. 4.5 Since the Applicant bonafidely believed that none of its activity was in the nature of business U/S 2(17) and supply U/S 2(87) of the GST Act and therefore it was not obliged to comply with the provisions of GST Act and had not filed the returns, the jurisdictional GST authorities issued notices directing applicant to file GST returns. When enquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieve the main object, would fall within the category of Educational Services and/or Health Care Services. Even if by any stretch of imagination such receipt would be covered entry Sr. No. 1 to Notification 12/2017 C.T. - dt. 28/6/2017 since the Applicant is registered under section 12 AA of the Income Tax Act and carrying out the activities covered by such Entry. 4.11 Hence, applicant's receipt falls under the Exempt Category of Services, even though covered by the different entries and as a result the Applicant is covered by the exception provided by section 23 and further clarification by the GST council. In conclusion the Applicant is neither liable for registration u/s 22(1) nor under the compulsory registration provision u/s 24. 4.12 Question No. (iii) (a) is whether the fees and other charges collected from students/ patients would constitute as outward supply under section 2 (83) of the GST Act, 2017 if yes then whether it will fall in classification entry at Sr. No 66 or the portion of nominal amount received from patients at Sr. No 74 of Notification 12/2017 CT(R) - dt. 28/6/2017. This question is mainly to clarify the Serial Number of Entry under which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Question (iii) (d) applicant states that its main activity is education and for that purpose students, parents, patients, relative of patients, staff members, expert faculties, and many others remain within the premises who need various facilities like Banking, Parking, stay arrangement, Food items, Photocopy etc. The establishment of the Applicant since located at small Village called Sevagram and therefore it is duty bound to ensure that the much-needed services are available in close proximity and therefore the required space is made available by the applicant society. Further, there is also a realisation from disposal of waste and unusable items, equipment etc. which is even not 0.001% of the total receipt of the institution and expenditure incurred. Though the institution does not intend to collect such charges for usage thereof but in order to avoid misuse some nominal amount is collected during the course of medical education and therefore such charges shall fall within the category of educational services qualifying for exemption as provided act Sr. No. 64 of Notification no. 12/2017 issued on 27.06.2017. 4.16 Though various judicial pronouncement have held that char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave gone through the facts of the case, documents on record, orders passed earlier in this case by this office as well as order passed by the Appellate Advance Ruling Authority and the submissions made by both, the applicant as well as the jurisdictional officer. 5.2 The Applicant has submitted that they are registered as a Charitable Society at Sevagram, under the Registration of Societies Act, 1860 and also registered under The Bombay Public Trust Act, 1950, with the sole objective of attending to the health needs of rural India. They are also registered under Section 12AA of the Income Tax Act, 1961 besides having recognition under The Foreign Contribution Regulation Act 1976. They have also submitted that MAHATMA GANDHI INSTITUTE OF MEDICAL SCIENCES IMGIMS) was established in Rule 1969 as a JOINT PROJECT with an agreed arrangement for funding the said project by Government of India, Government of Maharashtra and Applicant Society in the ratio of 50:25:25 respectively. They have further submitted that the Governing Council of MGIMS, as per University Statute comprises of Ten Members and a Chairman out of which, five Members are nominated by Kasturba Health Society and the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the project titled as MGIMS are the employees of Kasturba Health Society (KHS) only, where they will sue or be sued through the Kasturba health Society, a legal entity. MGM1S is not an independent organization much less a legal entity in different or separate from Kasturba Health Society and thus it is an authority for appointment, superintendence and termination as well as for disciplinary action against the employees working with MGIMS. Further the financial transaction of MGIMS is regulated by KHS only. The finances necessary for day to day activities are provided by the KHS and all the required infrastructure and facility such as land, building, roads, power supply, water supply, are owned and provided by KHS right from inception of the MGIMS. In other word words MGIMS does not have an independent existence other than that of KHS and for that reason, by no stretch of imagination or by any scale it can be held that the Kasturba Health Society and MGIMS are separate and distinct person as held by advance ruling authority of Maharashtra State in its order dated 04-05-2019. 18.6 This contention of the appellant shall find support from the ratio laid down by the Apex Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees working at MGIMS so also registration for workers on contract basis (Annexure-VIII) Holding of immovable property for the purpose of running of MGIMS are only the name of KHS as revenue/mutation records are concerned. (Annexure-IX) The State Government has empowered KHS to implement its various public Health related schemes like Mahatma Phule Health Care Scheme as well as Blindness eradication programme through the employees working at MGIMS. (Annexure-X). The RTO authorities have registered Ambulance, vehicles, plied for the purpose of MGIMS, in the name of KHS only. (Annexure-XI). Other Evidences The MGIMS is functioning within the framework set forth by the constitution of KHS is titled as Memorandum of Association and Rules and Regulations and as such there is no separate documents endorsed by Law former for regulating the function of MGIMS or anybody claiming through it. (Annexure-XII) For the reason that KHS is sole legal entity as responsible and answerable for every operational impact of MGIMS, the registration under the provisions of Goods and Services Tax Act 2017 is obtained in the name of KHS and as such all those trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading 9993 Services by Way of (a) health care services by a clinical establishment, an authorized medical practitioner or para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above. NIL NIL 5.7 The applicant is factually engaged in imparting medical education. The said courses are recognized by Nagpur University. The applicant is also providing Health Care Services as is seen from their submissions. The receipts received on account of imparting medical education service as well as the health care services supplied by the applicant are exempt from GST under the provisions of Sr. No. 66 and 74 of Notification No. 12/2017-Central Tax (Rate) dated: 28.06.2017. 5.8 In view of the above observations we refer to the questions raised in the subject application and discuss the same as under:- 5.9.1 Question No. (i) : Whether the applicant, a Charitable Society having the main object and factually engaged in imparting Medical Education, satisfying all the criteria of Educational Institution', can be said to be engaged in the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate turnover in a financial year exceeds threshold limit (which includes taxable and exempt supply or any other receipts). 5.10.3 The expression 'taxable supply' has been defined under the Act, as below: Section 2(108): taxable supply means a supply of goods or services or both which is leviable to tax under this Act; Thus a person who is engaged exclusively in the business of supplying goods or services or both that are not at all liable to tax or wholly exempt from tax is not liable for registration under Section 22 of the GST Act. Thus even without referring to section 23 of the Act, we can say that a person, whose aggregate turnover of all supplies is other than taxable supply, is not liable for registration. 5.10.4 Section 23, provides exemption to certain category/ class of person from obtaining registration under the Act. Such category consist of persons who are engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax or an agriculturist, to the extent of supply of produce out of cultivation of ? 5.10.5 Section 24 deals with compulsory registration with respect to categories of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business. 5.12.4 We find that, the fees and other charges received from students and recoupment charges received from patients would not constitute as outward supply as defined in section 2 (83) of the CGST Act, 2017 and MGST Act, 2017, rather, the fees /other charges would, at the most constitute as 'consideration' received against supply, taxable or non-taxable. Hence we do not discuss the classification entry of such fees and other charges received. 5.12.5 However it appears that, the applicant is actually asking whether such fees and other charges received from students and recoupment charges received from patients can be treated as consideration towards outward supply as defined in section 2 (83) of the CGST Act, 2017 and MGST Act, 2017. We hold that, the fees and other charges received from students are exempt from tax as the courses which are being conducted by the applicant are recognized courses, viz. recognized by Nagpur University. Regarding recoupment charges received from patients admitted in the hos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 12/2017- CT(Rate) dated 28.06.2017 as amended refers]. (1) Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. (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, hospitals also provide healthcare services. The entire amount charged by them from the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading 9997 Other services (washing, cleaning and dyeing services; beauty and physical well-being services; and other miscellaneous services including Services nowhere else classified). 9 - Thus said insurance service is covered by the, residuary entry being taxable at 18%. 5.15.1 With regard to question no. (iii) (d) it is noticed that applicant desires to know the rate of tax of services viz Whether the nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, and Refreshment which are support activities for attainment of main activities and further amount received on account of disposal of wastage would fall within the meaning of Supply qualifying for exemption under the category of educational and/or health care services. 5.15.2 It is admitted fact that the applicant provides renting and other services as discussed in this question and collects certain amounts towards provision of said services. What is the object of provision of said service, would not alter the basic nature of provision of any service. Each service or gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided by the educational institution itself or the institution outsources the activity to an outside contractor. Corrigendum to Circular No. 28/02/2018-GST; F.No. 354/03/2018 In Para 2 of the said circular, for it is immaterial whether the service is provided by the educational institution itself or the institution outsources the activity to an outside contractor. 2.1 If the catering services is one of the services provided by an educational institution to its students, faculty and staff and the said educational institution is covered by the definition given under para 2(y) of notification No. 12/2017-Central Tax (Rate), then the same is exempt. 151. No. 66(a) of notification No. 12/2017-Central Tax (Rate) refers] 2.2 If the catering services, i.e., supply of food or drink in a mess or canteen, is provided by anyone other than the educational institution, then it is a supply of service at entry 7(i) of notification No. 11/2017-CT (Rate) [as amended vide notification No. 46/2017-CT (Rate) dated 14.11.2017] to the concerned educational institution and attracts GST of 5% provided that credit of input tax charged on goods and services used in supplying the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, satisfying all the criteria of Educational Institution is liable for registration under the provisions of section 22 of the Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017 or it can remain outside the purview of registration in view of the provisions of section 23 of the said act as there is no Taxable supply. Answer :- The applicant is liable for registration as discussed above. Q.No. (iii) (a) Whether the fees and other charges received from students and re-8coupment charges received from patients (who is an essential clinical material for education laboratory) would constitute as outward supply as defined in section 2 (83) of The Central Goods and Service Tax Act, 2017 and Maharashtra Goods and Service Tax Act, 2017 and if yes then whether it will fall in classification entry at Sr. No 66 or the portion of nominal amount received from patients (who is an essential clinical material for education laboratory) at Sr. No. 74 in terms of Notification 12/2017-Central Tax-dt. 28/6/2017. Answer : The said charges collected are exempt from tax as discussed hereinabove. Q. No. (iii) (b):- Whether the cost of Medicines and C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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