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TMI Blog2024 (11) TMI 899X X X X Extracts X X X X X X X X Extracts X X X X ..... companies/insurance companies/insurance brokers, collect payment and then disburse the payment to labs, while retaining a margin; as a digital workflow tool/platform they provide the tool for free for the companies/insurance companies/insurance brokers to manage the operations. The diagnostic labs and wellness providers raise invoices on the applicant and the applicant in turn raises invoices to the contractor company by adding a margin. If the contractor is an insurance company, billing can be in the form of monthly invoice and the final amount will be adjusted against the next month invoice cycle. 3. In view of the above, the applicant has sought advance ruling in respect of the following questions: a. Whether the assessee need to collect GST on the diagnostic and lab services provided through third party diagnostic labs? If yes, Whether GST has to be collected for the whole invoice amount or on the margin on the supply alone and what will be the applicable tax rate and which SAC to be used? b. Whether TCS needs to be collected? c. Whether the assesse fall under the definition/meaning of an "Insurance Agent" if invoiced to an insurance company, If yes how is GST applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the operations. The diagnostic labs and wellness providers raise invoices on the applicant and the applicant in turn raises invoices to the contractor company by adding a margin. If the contractor is an insurance company, billing can be in the form of monthly invoice and the final amount will be adjusted against the next month invoice cycle. 6. Applicant's Interpretation of Law: The applicant furnishes their interpretation of law on the issues on which advance ruling is sought, inter alia stating as under: 6.1 The applicant with regard to the issue "Whether the assesse (applicant) need to collect GST on the diagnostic and lab services provided through third-party diagnostic labs" contends that they act as an aggregator for the said services for companies/insurance companies/insurance brokers; they provide access to the digital platform and digital tools, for companies/insurance companies/insurance brokers, to manage the workflows for availing the services of the said diagnostic labs / clinical establishments for their employees or group of people. 6.2 As per Notification 12/2017-Central Tax, services by way of health care services by clinical establishment are exempted and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant & the submissions made by their learned representative during the time of hearing. 10. The applicant submitted that they provide, under the contracts with companies, diagnostic labs and wellness services to the employees of the company or any group of people the company decides, through third party labs and wellness providers; the contract can be between an Insurance Company and the applicant to provide the said services to a specific group of people. These employees or group of people can select a specific date, time and what diagnostic and lab tests to be done from diagnostic lab and wellness providers from the list provided by the applicant; the medium of interaction between these employees and group of people with the applicant and with diagnostic labs can be through a mobile app developed by the applicant/whatsapp/e-mail/telephonic conversation. The applicant provides access to digital platform, digital tools to manage workflows for the companies/insurance companies/insurance brokers. The diagnostic labs and wellness providers raise invoice to the applicant and in turn the applicant raises invoices to the contractor company by adding a margin. In view of the forego ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s / insurance brokers i.e. recipients of service having contract with the applicant, selects the diagnostic labs or wellness providers and books specific date & time, from the list provided on the digital platform / App. Once the tests are done the diagnostic labs or wellness providers raise invoice on the applicant and the applicant in turn raises the invoice on the companies after retaining their margin. It is clearly evident from the foregoing that the service is not being provided by the labs to the recipients, through the App / Mobile platform, but through the applicant. The applicant merely provided the platform for the recipients so as to enable them to select the lab from whom the services are to be procured. Once the selection is over, the labs after the tests provide the reports directly to the recipients. The invoices are raised by the labs on the applicant. Thus the applicant doesn't qualify to be an e- commerce operator. 13. It is, further, observed from the submissions made by the applicant, at para 10 supra, that applicant is providing the diagnostics, labs and wellness services to their client companies, on procuring the said services from third-party labs & we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oes 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; Para 2(s): "clinical establishment" means 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 recognised 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; Sl. No. Chapter, Section, Heading, Group or Service Code (Tariff) Description of Services Rate (percent.) 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: [Provided that nothing in this entry shall apply to the services provided by a clinical establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The term "insurance agent" has not been defined under Section 2 of the CGST Act 2017. Section 42 of the Insurance Act 2015 stipulates that an insurance agent is a representative who sells the policy on behalf of an insurance company. The agent helps consumers select the right insurance based on their needs, but represents an insurance company. Insurance agents will sell and negotiate different insurance policies. In the instant case, the services being provided by the applicant are not connected, not even remotely, with the sale of insurance policies and hence the applicant does not fall under the definition / meaning of the "Insurance Agent". Therefore the applicant has to raise invoice on par with the other companies. 18. In view of the foregoing, we pass the following RULING (i) The assesse need to collect GST on the diagnostic and lab services provided through third party diagnostic labs, for the whole invoice amount and the applicable tax rate is 18% and SAC is 9993. (ii) The applicant doesn't qualify to be an e-commerce operator and thus the question "whether TCS needs to be collected" is redundant. (iii) The assesse does not fall under the definition/meani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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