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TMI Blog2025 (5) TMI 1098X X X X Extracts X X X X X X X X Extracts X X X X ..... entation of facts, shall render such ruling to be void ab initio in accordance with Section 104 of the Act. 5. The provisions of both the Central Goods and Services Tax Act and the Tamil Nadu Goods and Services Tax Act (herein referred to as the Act) are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the Central Goods and Services Tax Act would also mean a reference to the same provisions under the Tamil Nadu Goods and Services Tax Act. M/s. Maha Critical Speciality Division, No. 37, 2nd Floor, MTH Road, Ambattur, Chennai 600053 (hereinafter called as the "Applicant") are registered under the GST Act with GSTIN 33AAWFM5910H1Z2. The applicant has sought advance ruling on the following question: "Whether the supply of medicines and consumables used in the course of providing health care services to In-patients by pharmacy unit of Maha Critical Speciality Division for diagnosis or treatment during the patients admission in hospital would be considered as "Composite Supply" of health care services as under GST and consequently avail exemption under Notification No. 12/2017, CT (Rate) read with S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... since the nature of supplies service providers are same in case of both in-patients and out-patients there should not be any differences for the purpose of levy of GST based on duration of stay of the patients in clinical establishments. Further, it is also pertinent to mention that the definition of health care services as well as clinical establishment under Notification No. 12/2017 CT (Rate) dated 28.06.2017 issued under CGST Act, 2017 do not impose any specific restriction or condition to grant GST exemption only for in-patients. They have submitted that out-patients do not buy medicines voluntarily without prescriptions. It is being purchased as part of the advice from doctor to get themselves cured from illness. Hence it is clear case of composite health care services, wherein the purchase of medicines is mandated to complete the nexus of health care. The sale of medicines and doctor consultancy cannot be separated as without consumption of medicines illness cannot be cured. Therefore, the intention of law is always to allow exemption on health care services, which shall also include sale of medicines to out-patients and in-patients based on the prescription issued by the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices classifiable under SAC 999311. (iii) Tamil Nadu Advance Ruling Authority in case of M/s. Be Well Hospitals Pvt. Ltd., it was held that - Supply of Medicines and consumables used in the course of providing health care services to inpatients admitted to the hospital for diagnosis or medical treatment or procedures till discharge is a composite supply of inpatient health care service, provided the consolidated bill raised in the name of the patient indicates the supply of medicines and consumables during the course of provision of health care services as defined in Para 2 (zg) of Notification No. 12/2017-C.T(Rate), dated 28.06.2017 as amended and Notification No. II(2)/CTR/532 (d-15)2017 vide G.O.(Ms) No.73 dated 29.06.2017 as amended and the same is exempted from CGST and SGST as per SI.No.74 of the above notifications respectively. 3.4 The applicant has submitted that the supplies of medicines and consumables used in the course of providing health care services to out-patients by pharmacy unit is a composite supply of health care services. The applicant has made references to the definition of health care services, clinical establishment under the notification 12/2017. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the practice being followed at present is supply of medicines on payment of GST to the in-patients. They clarified further that they are not paying GST on all other charges involving surgery, procedures etc. for the in-patients, as they are clearly exempt under the Healthcare Services' category. To another query by the members as to whether the pharmacy is a separate entity or not, they clarified that the hospital and the pharmacy has same GSTIN and the pharmacy is very much a part of the hospital and medicines are not supplied to out-patients except when the patients who took medication earlier come back for follow-up. They further added that apart from other charges, the value of medicines and consumables used for the patient also form part of the final bill raised on the patient. The members then requested the Authorised Representatives to furnish copies of the sample bills raised on in-patients and out-patients, which the Authorised Representatives undertook to furnish within a couple of days' time. Discussions and Findings: 6.1. We have carefully examined the submissions made by the applicant in their advance ruling application and the submissions made during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tient submitted by the applicant vide bill No. B8919, dated 08.04.2024, it is observed that they have raised bill for health care charges, investigation charges, medicines and consumables charges for a value of Rs. 1,52,422/- without charging any GST. On perusal of sample invoice copies for outpatient submitted by the applicant vide bill No. D01000170 dated 07.04.2024, DO1000172 dated 07.04.2024, DO1000174 dated 07.04.2024, D01000178 dated 08.04.2024, D01000185 dated 08.04.2025 and D01000186 dated 08.04.2024, they have sold medicine from their pharmacy and collected GST on the sale of medicines. 6.5 In the instant case, the healthcare services rendered to in-patients is first taken up for discussion SAC 9993 Human Health and social care services 99931- Covers 'Human Health Services' 999311 Inpatient services This service code includes: i) Surgical services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and /or maintaining the health of a patient. ii) Gynaecological and obstetrical services delivered under the direction of medical doctors to inpatients, aimed at curing, restoring and/or maintaining the health of a patie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of an establishment to carry out diagnostic or investigative services of diseases". And "health care services" is defined under para 2(zg) as follows :- "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; 6.7 Further, the clarification provided under the Circular No. 32/06/2018-GST, dated 12.02.2018, in relation to the issue in question reads as below :- "5(2) Healthcare services have been defined to mean 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 (Para 2(zg) of notification No. 12/2017 CT (Rate). Therefore, hospitals also provide healthcare services. The entire amount charged by them from patients in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and other allied items supplied to in-patient forms part of composite supply of health care services, accordingly similar supply of medicines and other allied items supplied to out-patients shall also constitute a composite supply." 6.12 In this regard, it is to be noted that while providing health care related services to out-patients, medicines and consumables which is only of advisory nature, are prescribed to them by the Doctor who attends to the patient. It is also to be noted here that the pharmacy attached to the hospital/clinical establishment is an outlet to dispense medicines and consumables based on prescriptions, but in the case of out-patients, the said patients are not mandated to procure them only from the pharmacy attached to the hospital, and they are at liberty to procure the same from the hospital or other pharmacies of their choice, which fact is also admitted by the applicant themselves. Whereas, in the case of in-patients, medicines and consumables are necessarily issued by the hospital's pharmacy to ensure timely and proper treatment, and becomes an integral part of the healthcare service provided together to the in-patients. Further, as already discus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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