9911796707
TMI Blog2022 (7) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... reinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017. 3. Brief Facts of the case: The applicant, M/s Krishna Institute of Medical Sciences Limited is a public limited Company, and a multi-speciality hospital, rendering healthcare services and claiming exemption on the said service vide notification no. 12/2017 Central Tax Rate. Apart from healthcare services, the Company also makes pharmacy supplies based on doctors prescriptions to outpatients, which is taxable and accordingly the Company remits taxes on the same. The Company has been permitted to administer COVID-19 vaccine. The process of administering COVID-19 vaccination has been narrated below: 3.1 Administration of vaccination: Vaccine administration is critical to ensure that vaccination is safe and effective. CDC (Centres for Disease Control and Prevention) recommends that all health care personnel who administer vaccines receive comprehensive, competency-based training on vaccine administration policies and procedures before administering vaccines. Comprehensive skills-based training should be integrated into existing staff education programmes such as new staff orientation and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by paying required amount of fee for seeking Advance Ruling on the following issues, as mentioned below: 4. Questions raised before the authority: The applicant seeks advance ruling on the following: 1. Whether administering of COVID-19 vaccination by hospitals is Supply of Good or Supply of Service? 2. Whether administering of COVID-19 Vaccine by clinical establishments (Hospitals) qualify as "Health care services" as per Notification No. 12/2017 Central Tax Rate dated 28.06.2017? 3. Whether administering of COVID-19 vaccination by clinical establishment is exempt under GST Act? On Verification of basic information of the applicant, it is observed that the applicant is under State jurisdiction, i.e. Assistant Commissioner (ST) Ongole-1 Circle, Nellore Division. Accordingly, the application has been forwarded to the jurisdictional officer and a copy marked to the Central Tax authorities to offer their remarks as per Sec. 98(1) of CGST /APGST Act 2017. In response, no remarks are received from the jurisdictional officer concerned on the issue, for which the Advance Ruling sought by the applicant. 5. Applicant's Interpretation of Law: A. The relevant provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 28th June 2017, is defined as "a medical practitioner registered with any of the councils of the recognised system of medicines established or recognised by law in India and includes a medical professional having the reguisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force" B. Analysis of the provisions of the Act: Whether the supply of vaccination by hospitals is goods or service? If it is to categorize vaccination as sale of goods, we need to understand that vaccination is not supplied as a tangible product to the persons who intends to get vaccinated as a preventive measure. The vaccine vial consists of multiple doses which can be vaccinated to many persons and for such measurement, vaccination need to be carried by a technically competent person. The vaccination which is served to the person is one of the key medicines apart from the other consumables used during the vaccination process. Vaccine vial is not made available for sale by pharmacy/ hospitals and the beneficiaries are not at liberty to get it vaccinated by themselves or by other than a medical professional. Further, the beneficiaries ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the person who is desired to get vaccinated is to build the immunity against the chronic virus and get himself protected from harmful virus. The person is vulnerable to COVID-19 virus without vaccination. The vaccination process cannot be self-administrated without support of medical practitioner and the same is not available for purchase and get it processed by a different medical practitioner, i.e., the vaccination can be taken at a designated healthcare establishment considering complexity involved in the process and existing regulations. In the process of vaccination high level care and responsibility has been assigned to the medical professionals by regulatory authority with the sole objective to prevent the public from illness i.e., COVID-19 virus. Once, it has been considered as service, whether the supply of services is taxable or exempt? As per SI. No. 74 of Notification no. 12/2017, Healthcare services by clinical establishment or authorized medical practitioners or para medics are exempt. As per para (zg) of the said notification read with HSN Code 999312, the definition of Healthcare services includes, General medical services consisting of the prevention, diagnos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 present case, both the supplies are intrinsically connected with each other, and it is viewed as a single package by the recipient, where he purchases the vaccine and gets it administered subsequently. In order to determine, which of the above two, is the principal supply, it would rather depend upon the normal or frequent practices followed in the area of business or the perception of the consumer / recipient as well. Generally, the primary requirement of the recipient would be the receipt of the vaccine, basing on his choice i.e., Covishield or Covaxin. Thus, the supply of goods constitutes the major supply. The proper administration of the vaccine by the technically qualified personnel as prescribed by the guidelines of the government becomes the ancillary supply, which involves 'service charge'. Hence the taxability of the total transaction in the instant case is based on the tax rate of the principal supply i.e., sale o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is not allowed in the instant case as claimed by the applicant under 'health care services' provided by the 'clinical establishment'. The taxability of the supply is under 'composite supply', wherein the principal supply is the 'sale of vaccine' and the auxiliary supply is the service of 'administering the vaccine' and the total transaction is taxable at the rate of principal supply i.e, 5%. The service charge of administering the vaccine as prescribed by the Central Government from time to time is applicable and inclusive of the total value of the composite supply. With the foregoing, we rule as under. RULING (Under Section 98 of Central Goods and Services Tax Act, 2017 and the Andhra Pradesh Goods and Services Tax Act, 2017) Question: Whether administering of COVID-19 vaccination by hospitals is Supply of Good or Supply of Service? Answer: It is a Composite supply, wherein the principal supply is the 'sale of vaccine' and the auxiliary supply is the service of 'administering the vaccine' and the total transaction is taxable at the rate of principal supply i.e, 5%. Question: Whether administering of COVID-19 Vaccine ..... X X X X Extracts X X X X X X X X Extracts X X X X
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