9911796707
TMI Blog2022 (12) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... GST-ARA-120/2018-19/B-90 dated 10.11.2021., pronounced by the Maharashtra Authority for Advance Ruling (hereinafter referred to as "MAAR"). BRIEF FACTS OF THE CASE 3. The Constitution of India, though promised, the implementation of the effective health delivery system to the rural masses/unprivileged, but nothing significant could be achieved in this direction even after 20 years of an Independence. In order to overcome this utter failure, the Government of India, after setting up several Committees, had decided to involve the NGO's in establishing such "Medical Institute" as a "Joint Venture" with the participation of State Government, which can produce the qualified and trained Doctors, who are willing to go and settle down in rural areas, and thus, the promise given in this direction can he fulfilled. and in order to materialise this, the proposals were invited from the NGOs. 4. In response to Government of India's Initiative to fulfil its constitutional obligations which is followed by the offer, the Kasturba Health Society emerged as Charitable Institution by way of Registration Under the Societies Registration Act, 1860 vide registration No.95/64(Wardha) and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his scenario, the Appellant without having the GST registration No. was facing the practical difficulties, and therefore, in order to overcome these issues, it had applied for Voluntary Registration, and as a result, got registered with GSTN having registration No. 27AAATK2046G1ZV with effect from 21st July 2017. 9. Though the Appellant society got registered voluntarily under GST Act for the reasons mentioned above, it had not filed any returns till March 2019, since none of the activity was in the nature of "business" so as to fall within the meaning of "supply" as provided in section 2(87) of the GST Act and hence it bonafidely believed that it is not obliged to comply with the provisions of GST Act, The jurisdictional GST authorities have issued notices to the Appellant society for adhering to the compliance along with an obligation of filing of returns and therefore the Appellant institution enquired with other Institutions, those who are having engaged in similar activity. Where it is learnt that none of them is registered under GST act and further learnt that those who have attempted to register. had also applied for the cancellation of registration, which is duly cancelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are services." c. Whether the nominal charges received from patients (who is an essential clinical material 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." d. Whether the nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, Refreshment etc. 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." 11. The MAAR vide order No. GST-ARA-120/2018-19/B-51 dated 04.05.2019, held that the Kasturba Health Society and MGIMS are separate and distinct person and as such are two separate entities and therefore question were not answered. The Applicant preferred an appeal befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is taxable at the rate of 18%. GROUNDS OF APPEAL 13. The order passed U/S 98 of the Central Goods and Services Act 2017 and The Maharashtra Goods and Services Act 2017 since based on sheer Surmises, Conjectures. Self-imaginations and self-contradictions is bad in law and needed to be quashed. 14. The order passed U/S 98 of the Central Goods and Services Act 2017 and The Maharashtra Goods and Services Act 2017 is bad in law in as much as treating that providing Medical Education in terms of university mandate is Business. 15. The MAAR has failed to interpret the various definition and more particularly the provision of section 22, 23 and 24 and in result erred in concluding that the appellant is liable for registration under the GST act. 16. The MAAR has erred in holding that the amount received from patients towards nominal charges in order to make them eligible in getting concession in medical treatment is taxable @ 18% under the residual entry. 17. The MAAR has erred in holding that the nominal charges received from the activities which are not in the nature of business are taxable @ 18% as Rent. 18. The MAAR has failed to consider that the Appellant is covered by Sr. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is needed to the facts of the question No. (iii) c where the amount received from patients is considered as taxable at the rate of 18% under the residuary entry whereas the same is related to treatment of illness and question No.(iii) d where the nominal amount, received on account of parking place, disposal of waste, is considered taxable @ 18% as rent. 24. The Appellant's activities and organizational structure has been explained in detail in Advance Ruling Application filed before the MAAR. Appellant will rely on various factual submissions made in this advance ruling application during the course of hearing of this appeal. These factual submissions are not being repeated here-in for the sake of brevity. However, the same may be please be treated as a part of submissions in this appeal too. RESPONDENT'S SUBMISSIONS 25. The Jurisdictional Officer vide their letter dated 08.02.2022 have made the following submissions: 25.1 That the Appellant-Society and M/s. MGIMS are two separate and independent persons in so far as the GST law is concerned; and therefore, the contention of the Appellant-Society in as much as they and M/s. MGIMS may be treated as one and the same e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em, and accordingly, the same would be considered as exempt supply. 27. As regards the rental income received from the parking area and for letting their property for running a canteen to cater foods to the patient and their relatives, the Appellant submitted that the same are not primary services, but those are incidental activities undertaken to carry out the main activity, i.e., health care services, therefore, the said incomes will also be exempt from levy of GST. PERSONAL HEARING 28. The personal hearing in the matter was conducted on 25.11.2022, which was attended by Mr. Rajendra Bhutada on behalf of the Appellant. Shri Rajendra Bhutada apart from reiterating the earlier submissions made while filing the present appeal, also submitted with regard to the Unparallel Health Insurance Scheme floated by them that the nominal charges received by them under the said scheme so as to provide the benefit of concessional rates for investigations and treatment of the disease, may be treated as advance towards the provision of the health care services which would be provided by them to the subscribers of this scheme in future. He further added that though the name of Scheme includes th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope of term "business" is not restrictive, and hence, the term "business' would not only include the activities as per its ordinary or natural meaning but also the activities, such as any trade, commerce, manufacture, profession. vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit, as enumerated in its definition (Supra). Thus, from the definition, it is seen that the term "business" also includes any "profession" whether the same is carried out for pecuniary benefit or otherwise. Since the term "profession" is not defined under the CGST Act, 2017, we would like to resort to its dictionary meaning. Meaning of the term "profession" as per the "Cambridge Dictionary": Any type of work that needs special training or a particular skill, often one that is respected because it involves a high level of education. Meaning of the term "profession" as per the "Collins Dictionary": A profession is a type of job that requires advanced education or training. 31.2 Thus, on perusal of the aforesaid dictionary meaning, it is amply clear that the Appellant-Society through its establishment MGIMS is undertaking such job or work which req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , commerce or manufacture and any transaction in connection with, or incidental or ancillary to, such trade, commerce, manufacture, adventure or concern [9] and any transaction in connection with, or incidental or ancillary to, the commencement or closure of such trade, commerce, manufacture, adventure or concern; 31.5 Now, on perusal of both the definitions of the term "business", it is noticed that the definition of the term "business" under the erstwhile Bombay Sales Tax Act, 1959, does not include the entries "profession and vocation", which are present in the definition of the term -business" under the CGST Act, 2017, thereby, rendering much wider meaning and scope to the term "business" under CGST Act, 2017. Thus, the term "business" under the CGST Act, 2017 is wide enough to include the activities of the Appellant-Society as discussed hereinabove. Thus, the contention of the Appellant is not tenable. 32. Now once it has been established that the activities undertaken by the Appellant-Society are in the nature of business, we will proceed to examine as to whether the said activities of educational services and health care services undertaken by the Appellant will be constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NIL NIL Further. the definition of the term "educational institution" is provided under clause (y) of the definition section of the aforesaid exemption notification, which reads as under: "educational institution" means an institution providing services by way of,- (i)..................... (ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the time being in force: (iii)..................... 33.1 As the services of medical education provided by the Appellant-Society is recognized by the Maharashtra University of Health Sciences, Nashik and Nagpur University, MGIMS, an establishment of the Appellant-Society, falls under the category of "educational institution" as defined under the GST law, and accordingly, it is held that the medical education services provided by the Appellant to the students will attract nil rate of GST as per the aforesaid entry 66, ibid. 33.2 Further. the second activities of the health care services provided by the Appellant-Society through its establishment, Kasturba Hospital, will squarely fit under the entry at SI. No. 74 of the exemption Notification No. 12/2017-C.T. (Rate) dated 28.06.2017, the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es/transactions performed by the Appellant and covered under question no. (iii)(b), (iii)(c) and (iii)(d). They are enumerated as under: I. the cost of Medicines and Consumables recovered from OPD patients along with nominal charges collected for Diagnosing by the pathological investigations, other investigation such as CT-Scan, MRI, Colour Doppler, Angiography, Gastroscopy, Sonography during the course of diagnosis and treatment of disease [Question (iii) (b)]; II. the nominal charges received from patients towards an "Unparallel Health Insurance Scheme" so as to provide them the benefit of concessional rates for investigations and treatment of the disease [Question (iii) (c)]; III. the nominal amount received for making space available for facilities, such as Banking, Parking, Refreshment etc. and the amount received on account of disposal of wastes [Question (iii) (d)]; 35. As regards to the first activity, mentioned at I [Question (iii) (b)] above, where the Appellant are recovering the cost of Medicines and Consumables recovered from OPD patients along with nominal charges collected for Diagnosing by the pathological investigations, other investigation such as CT-Scan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... velopment Authority of India) so as to run any insurance business on their account, therefore, the said scheme cannot be considered in the nature of insurance services. However, we seek to differ with the observation of the MAAR regarding the classification of the impugned services wherein the MAAR has classified the impugned services under the heading 9997 at SI. No. 35 of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017. On the other hand, we concur with the Appellant's contention wherein the Appellant have contended that the said nominal amount being charged by them are in the nature of advances towards the provision of the health services which would be provided by them to the subscribers of the said scheme, and hence is eligible for exemption under the entry at SI. No. 74 of the exemption Notification No. 12/2017-C.T. (Rate) dated 28.06.2017. 37. As regards to the third activity, mentioned at III [Question (iii) (d)] above, wherein the Appellant is receiving a nominal amount for providing space for the facilities, like Banking, Parking, Refreshment Canteen. etc., it is observed that the said activities are not directly provided to the students or patients, who ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. Thus. It is apparent that these services under consideration are not provided to a single recipient as mandated under the provisions of composite supply under section 2(30) of the CGST Act. 2017, and accordingly, cannot be said to be part of the composite supply. Thus, the said service of renting of immovable property will be considered as separate and independent supplies, and will be taxable at the applicable rate of 18% in terms of the item (iii) bearing the description "Real estate services other than (i) and (ii) above" of the entry at SI. No. 16 of the Notification No. 11/2017-C.T. (Rate) dated 28.06.2017. 37.3 Now, as regards the activity, wherein the Appellant receive an amount on account of disposal of wastes such as medical equipment, apparatus, and other instruments, etc., by selling them to the interested vendors, it is found that MAAR has not answered this query. In this regard it is observed that the said activities of the supply of the scrap to the vendors are not being made to the students or the patients. who are the recipients of the exempted supply of educational services or health care services respectively, and therefore, the said supply can aptly be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
