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TMI Blog2023 (6) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... ni Psychiatric Clinic (hereinafter referred to as "applicant") un registered applicant. Applicant is registered as Partnership firm, under section 15 of The Clinical Establishment (Registration and Regulation) Act, 2010. The clinical Establishment is registered for providing medical services as a Single Specialty under Allopathy System of Medicine by Dr. Rinet Sonia Dsouza (MBBS, MD) is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (b), (e) & (f)given as under: (b) applicability of a notification issued under the provisions of this Act; (e) determination of the liability to pay tax on any goods or services or both, (f) whether applicant is required to be registered; A. SUBMISSION OF THE APPLICANT: (in brief) 1. M/s Sanjeevani Psychiatric Clinic (hereinafter referred to as "applicant") registered as Partnership firm, is a clinical establishment located at Sardar Shahar Mega Highway, opp. Bhadu Petrol Pump, Rawatsar Distt. Hanumangarh-335524 under section 15 of The Clinical Establishment (Registration and Regulation) Act, 2010. The clinical Establishment is registered for providing medical services as a Single Specialty under Allopathy Syste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rugs and his ability to withdraw from drugs. * On the basis of such examination, the psychiatrist prescribes medicines and the duration for which the medicines are required to be consumed. * The details of substance used by the patient and other parameters are also captured in Patient's file. iii. Dispensing of Medicine by psychiatrist - * Based on examination by the psychiatrist and prescription issued by him, patients are dispensed medicines in exact quantity as per the prescription of psychiatrist. * The patient has no choice to take the medicine from a general medical store or take medicine of a different brand or in a different quantity. * Moreover, the patient has no choice/freedom to take these Medicines from any other De-Addiction Center based on said prescription. * The drugs used for treating drug addicts are strictly government-controlled drugs and are not available for sale on general medical stores. * The name and quantity of the medicine dispensed to the patient along with dose per day of medicine is captured in Daily Dispensing Register. * Further, a stock register of the medicine is maintained at the establishment, which is verified and signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to be two separate persons and the supply of activities or transactions inter se shall be deemed to take place from one such person to another;] (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration [(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.] 5. That as per Section 2(30) composite supply is defined as (30) "composite supply" means a supply made by a taxable person to a recipient 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;; (90) "principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; 6. That as per Section 8 Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly four elements i.e. a) A Supply (Generic) b) Of Goods or Services c) For Consideration d) In course of or furtherance of business 11. That in the absence of any of these elements, the transaction falls beyond the scope of supply as given under the GST Act(s) and hence in such a case, the levy of tax would not be attracted. In the given scenario, on perusal of fact, it is evident that all the four elements as specified above are available to qualify the treatment of SUD Patients by the applicant as a supply. 12. That, in continuation of above, the subsequent issue for determination is whether this transaction is an individual supply of service or goods or both or whether it's a composite supply. A Composite Supply, from its definition under the Act(s) has following elements: a) a supply made by a taxable person to a recipient b) consisting of two or more taxable supplies of goods or services or both, or any combination thereof, c) which are naturally bundled and supplied in conjunction with each other d) in the ordinary course of business e) And one of which is a principal supply. 13. That in treatment of a patient suffering from SUD as outpatient the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such decisions. 18. That thus as per the provisions of Mental Healthcare Act, a patient shall be admitted only on satisfaction of a medical officer or mental health professional that the seventy of illness requires admission or that the patient would benefit from admission or where the patient has made the request for admission of his own free will Thus, every patient who requires a treatment need not be admitted, patients can be treated as outpatients as well. 19. That further, as per Central Drugs Standard Control Organization (FDC Division), the medicines provided to SUD patients i.e. Buprenorphine 2 mg/0.4 mg sublingual Tablet and FDC of Buprenorphine (2 mg+0.5 mg and 0.4 mg + 0.1 mg) sublingual tablets are strictly Government controlled drugs which are not available for sale on general medical stores. 20. That the supply of the above-mentioned drugs is restricted by government to be supplied only to specified clinical establishments. Further, the name, quantity and dosage issued to SUD patients arc also recorded in Daily Dispensing Register on real time basis. 21. That the SUD patients are mentally unstable, hence the medicines provided to them by as prescribed by Psychia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eted. 24. That on perusal of above it is evident that, unless the number of days specified in prescription for medicine consumption have passed, fresh prescription cannot be given by the doctor. Hence prescription, further issuance of medicine and prescription after re-examination of the patient are interdependent and cannot be bifurcated in any manner whatsoever. 25. That, based on above paras, it can be clearly said that the supply of medicine by the applicant to SUD patients as outpatient is a part of treatment and cannot be detached or taken up independently from the examination of the patient in addition to registration and counselling services. Thus, in our opinion, the given chronological activities of outpatients cannot be segregated as separate or independent activities and should be treated as part and of being provided to SUD patients as outpatient by the applicant. 26. That further, the given activity of undertaking treatment of the SUD parents by the applicant along with dispensing of medicine does not have any constituent which can be separated or bifurcated. The process of examination, prescription and issuance are integral parts of the whole activity of supplying ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closely linked that they constituted a single indivisible economic transaction. Separate pricing was not relevant. Predominant element was customization as only customization would make the software useful to consumer and price thereof was also higher. Since service element viz., customization was predominant, whole contract constituted a 'single supply of service' and was liable to service tax [In favor of revenue] Specified descriptions of services or Bundled Service - Principles of Interpretations -Combining various elements into single transaction - If two or more elements are so closely linked that they form a single indivisible economic supply, which can be split only artificially, all those elements constitute a 'single supply' [In favour of revenue] Service - Definition of - Predominant element determines classification - If predominant element is service, then, whole transaction amounts to service even if element of goods is also involved - Predominance is to be determined considering extent, duration, usefulness and cost of various elements, economic essence, and intention of parties [In favour of Revenue] 31. That in fact in case of Hindustan Shipyar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs, implants, stents etc. that are required for his treatment/medical procedure and the cost. The patient accepts the offer and opts for a particular procedure. Once having opted for a particular procedure, the choice of the drugs, implants, stents etc. would depend upon medical advice and only were, medically permissible, the choice of the patient. The question posed before us would, therefore, must be further refined, namely, whether a medical procedure can be severed into separate elements of service and sale with service being the medical advice and medical procedure and the sale being the supply of medicines, surgical items, implants, to patients whether as part of a package or to an individual patient? "We therefore, have no hesitation in holding that medical procedures/services offered by the petitioners are a service. The supply of drugs, medicines, implant, stents, valves and other implants are integral to a medical services/procedure and cannot be severed to infer a sale as defined under the Punjab or the Haryana Act and therefore, are not eligible to value added tax." [Emphasis supplied] 34. That the fact of the applicant is also similar because once it is decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said notification shall mean a hospital, nursing home, clinic, sanatorium, or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality, or pregnancy in any recognized system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases; 42. That there is no ambiguity in the fact that the applicant is a Clinical Establishment since it is registered under section 15 of Clinical Establishment (Registration and Regulation) Act, 2010 for providing medical Services as a Single Specialty under Allopathy System Of medicine. 43. That, the applicant is providing services of Treatment of patients suffering from substance use disorder specifically using Allopathy system of medicine. Allopathy is recognized systems of medicines in India as per Clause (h) of Section 2 of the Clinical Establishments Act, 2010. 44. That based on above paras, it is understood that the Sanjeevani Psychiatric Clinic is providing Health care services through a Clinical Establishment as defined in para 2(s) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant and will take up the above question for discussion one by one. 2) The applicant M/s Sanjeevani Psychiatric Clinic registered as Partnership firm. Applicant submitted provisional registration certificate issued by DRA & CMHO Hanumangarh regarding clinical establishment located at Sardar Shahar Mega Highway, opp. Bhadu Petrol Pump, Rawatsar Distt. Hanumangarh-335524 under section 15 of the Clinical establishment (Registration and Regulation) Act, 2010 The clinical establishment is registered for providing medical services as a Single Specialty under Allopathy System of Medicine by Dr. Rinet Soma Dsouza (MBBS, MD) We have limited scope Io check the registration certificate so We consider th.it applicant has truly submitted that they are registered clinical Establishment and pronounce the ruling accordingly. 3) The applicant submitted that the applicant is providing Treatment of patients suffering from substance use? disorder (SUD) (addiction of drugs) in the state? of Rajasthan and as per National Institute of Mental Health, Substance Use Disorder (SUD) is a mental disorder that affects a person's brain and behavior, leading to a person's inability to control their use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e next, whether the supply made by applicant is exempt under entry 74(a) of notification no 12/2017-CGST Rate dated 28 06 2017 and whether this is composite supply or not 6.1) The relevant portion of Notification no. 12/2017-CGST Rate dated 28-06-2017 as amended is as under-: SI.No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition 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 6.2) As per Section 2(30) of CGST Act, 2017, defines "Composite supply" as supply 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. Healthcare service is exempt from GST Tax. Whereas supply of medicines is taxable. We understood that the supply to the in-patients by the hospitals, as advised by the doctor may be a part of compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t entity or a part of an establishment to carry out diagnostic oi investigative services of diseases; 2(zg) "health care services" means 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 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; 6.5) We held that Services for the prevention and treatment of substance misuse and substance use disorders have traditionally been delivered separately from other mental health and general health care services, because substance misuse has traditionally been seen as a social or criminal problem, prevention services are not typically considered a responsibility of health care systems. Further people needing care for substance use disorders have had access to only a limited range of treatment options that were generally not covered by insurance. Well-supported scie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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