TMI Blog2020 (6) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... X-Ray and Mammography machines installed in the clinical establishments (Customers of SHPL) are to provide diagnostic images to the clinical establishments - It is observed that there are kinds of Technicians. For the exemption to be admissible, the technician s role/ activity has to amount to Healthcare Services. Not all the technicians provide healthcare Services. It is observed that services of technicians who are Emergency Medical Technicians or the services of technicians who are akin to Para-medics, are healthcare services. Apparently the CBIC s circular ibid refers to such technicians only. It is observed that SHPL is providing the input services of provision of installing/operating the MRI, CT scanners etc in the premises of its Customers (clinical establishments) and providing diagnostic images to them (clinical establishments) - providing diagnostic images is not equivalent to providing diagnosis, and the services by SHPL is not an independent establishments for providing diagnostic service. To avail the benefit of the exemption all the limbs of the notification must be satisfied i.e., the services have to be health care services as defined in clause (Zg) of par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal was been filed on 24.06.2020 and is within time when read with COVID-2019 related extension provided to GST matters vide notification 35/2020-Central Tax dated 3.04.2020, This notification extends the time limits to 30.06.2020, where arty time limit for completion or compliance of any action, by any authority or by any person, has been specified in, or prescribed or notified under the said Act, which falls during the period from the 20th day of March, 2020 to the 29th day of June, 2020, and where completion or compliance of such action has not been made within such time, then, the time limit for completion or compliance of such action, shall be extended upto the 30th day of June, 2020. I. BRIEF FACTS OF THE CASE M/s Siemens Healthcare Pvt. Ltd, Plot No. 78, JIL Building, Sector 18, Gurugram (hereinafter, the Appellant ) has been, historically, in the business of trading medical equipment required to spread its business dimension by involving itself in the provision of diagnostic imaging services to hospitals (customers) and other clinical establishments for various Haryanais registered as a State taxpayer under GST in Gurugram. They are engaged in selling, estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures (scheduling patients and providing pre-scan instructions thereby preventing rescheduling); (iii) Correctly positioning patients to get the right image. For, instance to position patients for an 1VIRI, the Applicant would need to decide on the correct imaging coil, the best Position and the protocol for the imaging; (iv) Operating equipment optimally to get accurate diagnostic images; (v) Communicating with physicians/ radiologist about images; (vi) Delivering/ handing over the acquired images to the Picture Archiving and Communication System ( PACS ), The application for advance ruling has been filed as the taxpayer intends to also deploy their professionals to run such machines in the hospitals, while maintaining these machines also. II. QUESTIONS IN ADVANCE RULING: The RULING has been requested on the QUESTION:- Whether the provisioning of diagnostic imaging services under the agreement/contract executed by Siemens Healthcare Pvt. Ltd. (SHPL) with its customers would qualify for exemption from levy of GST under S. No. 74 of the Notification 12/2017-CT(R) dated 28/06/2017? The Advance Ruling Authority (AAR) had provided the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocess intrinsically linked or associated with diagnosis or which assists in diagnosis . 4. Hence, diagnosis in by way of diagnosis precludes a completed diagnosis. For understanding of the term diagnosis as commonly accepted and construed in the health care industry, the definition of the term diagnosis provided by National Cancer Institute, is as under:- The process of identifying a disease, condition, or injury from its signs and symptoms. A health history, physical exam, and tests, such as blood tests, imaging tests, and biopsies, may be used to help make a diagnosis. That, dictionary meaning of the term Diagnosis is provided below:- The act or process of discovering or identify a diseased condition by means of a medical examination, laboratory test, etc. (Collinsdictionary.com) Investigation or analysis of the cause or nature of a condition, situation, or problem (merriam-webster.com) Further, in common parlance, diagnosis includes following components (source: Wikipedia.com):- Complementing the already given information with further data gathering, which may include questions of the medical history (potentially from other peo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mage resolution produced by MRI is quite detailed and can detect tiny changes of structures within the body. For some procedures, contrast agents are used to improve delineation of structures; b. Computerized Tomography (CT): Computed tomography (CT) is a diagnostic imaging test used to create detailed images of internal organs, bones, soft tissue and blood vessels. The cross-sectional images generated during a CT scan can be reformatted in multiple planes, and can even generate three-dimensional images which can be viewed on a computer monitor, printed on film or transferred to electronic media; c. X-Ray/ Mammography: Radiography is an imaging technique using X-rays to view the internal form of an object. This is the oldest and most common imaging technology and most of us have experienced this. Mammography is an advanced X-Ray picture of the breast, often using 3D reconstruction. It is used to check for breast cancer in women who have no signs or symptoms of the disease (screening). It can also be used if you have a lump or other sign of breast cancer (diagnosis). d. PET-CT: Positron emission tomography - computed tomography (better known as PE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imperative and must for a comprehensive and accurate diagnosis of the specific medical condition of the patient. That is to say, providing visual representations of the interior of human body or function of some organs or tissues is the stepping stone for many clinical analysis or medical interventions. Thus, Appellant s scope of services under the proposed contract to obtain images (creating visual representations) of interior of body through a medical imaging or radiology equipment to assess the current medical condition of the patients for clinical analysis and medical interventions unequivocally falls within the ambit of the term by way of diagnosis for the purpose of the Notification. 6. Whether input services for a hospital are entitled for the exemption? At the outset, it is submitted that the AAR, Haryana in its impugned order has not disputed that the Appellant would work as an independent entity at the customer s premises and provide the diagnostic imaging services falling under SAC 9993 (i.e. human health and social care services). Such healthcare services provided by the Appellant are its output supply. Therefore, once such factum of providing heal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce the services provided by the Appellant are healthcare services , it would be redundant to say that they are not for the purpose of healthcare services . The Authority for Advance Ruling, Haryana has erroneously distinguished the judgment of the Hon ble Supreme Court of India in His Holiness Kesavananda Bharati Sripadagalvaru v. State of Kerala and Another, (1973) 4 SCC 225, which dealt with the meaning of by way of . The relevant extract is provided below:- As the words and phrases - Permanent Edition, Vol. ii, p-111 would show that by way of may be taken to mean as for the purpose of in character of, as being and was so intended to be construed in an Act providing that certain companies should pay an annual tax for the use of the State, by way of a license for their corporate Franchise. The illustration given should show that in fact the payment of license fee, is not a tax, but it is so considered to be by way of tax. In this respect the AAR, Haryana has failed to consider that judicial principles and rules of interpretation can be applied universally in all cases irrespective of the issue under challenge. Further, in the aforesaid judgment the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he SAC mentioned in column 2 of the Exemption Notification is only indicative. It is stated that Column 2 of the Exemption Notification mentions SAC 9993 which includes all types of human health and social care services. Further, diagnosis and diagnostic imaging services are covered under SAC 999312 to the Explanatory Notes. Therefore, if the intention, of the legislature was to restrict the scope of exemption entry to actual diagnosis then it would have clearly indicated SAC 999312 in Column 2 of the table to the Exemption Notification. However, Column 2 mentions SAC 9993 and Column 3 starts with the phrase services by way of which clearly means that the intention of the legislature was to further expand the scope of the exemption entry. It is a settled principle of law that exemption Notification should be interpreted harmoniously to give full effect to the legislative intent behind introducing the same. 9. Reference is drawn to the decision of Supreme Court in the case of Tata oil Mills Co. Ltd. Vs Collector of Central Excise on 14 August, 1989,1990 AIR 27, 1989 SCR (3) 839 , Wherein it has been held that in trying to understand the language used by an exempti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tals hire senior doctors/ consultants/ technicians independently, without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer employee relationship. Will such consultancy charges be exempt from GST? Will revenue take a stand that they are providing services to hospitals and not to patients and hence must pay GST? Clarification : Health care services provided by a clinical establishment, an authorized medical practitioner or para-medics are exempt (SI. No. 74 of notification No. 12/2017- CT (Rate) dated 28.06.2017 as amended refers). Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. Basis the above clarification, it can be construed that services of technicians/ consultants to the hospitals, for further provision of services to the patients by the hospitals, shall be construed as provision of healthcare service by the third parties and shall qualify for the exemption. Given this, services so rendered by the Appellant being in the nature of the services of a technician/ consultant to its customers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt may not be really called for in the circumstances of the case. We are of the opinion C / that this appeal has to be dismissed on the ground urged by the assessee himself. As stated above, the order of the Deputy Commissioner is said to have been made on 6-1-1973, but it was served upon the assessee on 21-11-1973 i.e. precisely 10.5 months later. There is no explanation from the Deputy commissioner why it was so delayed, if there had been a proper explanation whatsoever, we must presume that the order was not made on the date it was purports to have been made, it could have been made after the expiry of the prescribed four years period. Basis the above, it can be construed that due to such inordinate delay in serving the ruling on the Appellant, the AAR, Haryana had not passed the ruling on the date it purported to have been made. Given the above, the ruling of the AAR, Haryana is ought to be set aside and the appeal of the appellant must be allowed. IV. RECORD OF PERSONAL HEARING Shri Gajendra Maheshwari, Advocate, Attended the personal hearing on 25-08-2021 through video conference on behalf of the Appellant and emphasized on all the points already made in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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; 2. The Board s Circular No 32/6/2018-GST dated 12.02.2018 mentioned by the Appellant at the time of personal hearing reads as under: 5. Is GST leviable in following cases: (1) Hospitals hire senior doctors/ consultants / technicians independently, without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer employee relationship. Will such consultancy charges be exempt from GST? Will revenue take a stand that they are providing services to hospitals and not to patients and hence must pay GST? Health care services provided by a clinical establishment, an authorised medical practitioner or para-med ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the patient therefore the exemption is admissible to their activity. 3. The exemption (Sr. No. 74) Notification No. 12/2017-CT(rate) dated 28.07.2017 is for (a) Health Care Services provided by way of transportation of a patient in an ambulance: Table 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 para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above. Nil Nil 4. We find that the exemption provided vide the Notification is to Services by way of- (a) health care services - by a clinical establishment, - an authorised medical practitione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the clinical establishments. It is observed that there are kinds of Technicians. For the exemption to be admissible, the technician s role/ activity has to amount to Healthcare Services. Not all the technicians provide healthcare Services. It is observed that services of technicians who are Emergency Medical Technicians or the services of technicians who are akin to Para-medics, are healthcare services. Apparently the CBIC s circular ibid refers to such technicians only. As Wikipedia quotes from the publications of US Bureau of Labour Statistics:- An emergency medical technician (EMT), also known as an ambulance technician, is a health professional that provides emergency medical services. EMTs are most commonly found working in ambulances. In English-speaking countries, paramedics are a separate profession that has additional educational requirements, qualifications, and scope of practice . Miller-Keane Encyclopaedia and Dictionary of Medicine, Nursing and Allied Health, Seventh Addition 2003 by Saunders defines a Paramedic as,- a person trained to manage the emergency care of sick or injured person transport to a hospital, including administration of injec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blishment which in turn makes use of these images provided by the appellant with the advice/opinion of medical practitioner/pathologist/radiologist makes diagnosis provides it to the patient, the appellant can t be said to provide diagnosis services to the patient, hence not eligible to the exemption. 8. The Authority for Advance Ruling (AAR) has observed that the term by way of diagnosis does not include any intrinsically linked processes and in the instant case it is not the Applicant firm but only the Hospital which further provides the diagnostic service, and thus, a health care service. In fact, the Applicant has itself mentioned in the Statement of Facts adduced to the Appeal that the technical preparation of the images is further submitted to the Radiologist for diagnosis, ...the Applicant would complete the post-processing of the images acquired and also archives and files the images, before pushing them to the Radiologist for review/ reporting and diagnosis (emphasis supplied). (Para 6(g), Statement of Facts submitted in Appeal) It is therefore clear that the services exempt under the Notification are healthcare services and would include diagnosis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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