2020 (10) TMI 1300 - AAR - GST

Uttarakhand PPP Contract: GST Exemption for Healthcare Services

In Re: M/s. Shubham Sarvam Medical Projects LLP,

In Re: M/s. Shubham Sarvam Medical Projects LLP, - TMI Issues Involved:1. Classification of the services provided by the applicant under the PPP contract to the Uttarakhand Government Nodal Agency.2. Applicability of serial numbers 3, 73, and 74 of Notification No. 12/2017 dated 28.06.2017 (as amended) on the LLP.Detailed Analysis:(A) Classification of Service Provided by the Applicant to the Society:A.1 Context and Scope:The applicant is engaged in providing services to the Uttarakhand Health and Family Welfare Society, a nodal agency of the Uttarakhand Government, under a PPP contract. The contract involves the operation and maintenance of healthcare facilities and provision of healthcare services in Uttarakhand. The applicant's responsibilities include developing healthcare facilities, supplying medical equipment, providing manpower, and maintaining a comprehensive website for healthcare facilities.A.2 Ancillary Services and Taxability:The question arises whether ancillary services such as laundry, security, and website maintenance provided along with healthcare services are taxable. These ancillary services and infrastructure are considered support services to 'healthcare services' and are treated as incidental to the primary healthcare service. According to Section 2(30) of the Act, a 'composite supply' includes multiple supplies naturally bundled and supplied together, with one being the principal supply. Section 2(90) defines 'principal supply' as the predominant element of a composite supply. Section 8 states that tax liability on a composite supply is determined based on the principal supply.In this case, the ancillary services are part of a composite supply with 'healthcare services' as the principal supply. Therefore, these ancillary services are covered under the composite supply of healthcare services and are exempt from GST.A.3 Exemption of Healthcare Services:Healthcare services provided by a clinical establishment, authorized medical practitioner, or paramedics are exempt from GST under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. The definition of 'healthcare services' includes diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy, excluding cosmetic or plastic surgery unless medically necessary.A.4 Conclusion on Classification:The applicant's services are classified under service code 9993 as 'healthcare services' and are exempt from GST as per entry no. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.(B) Applicability of Notification No. 12/2017 on LLP:B.1 Exemption Based on Service Category:Notification No. 12/2017-Central Tax (Rate) exempts intra-state supply of specified services from GST, subject to conditions mentioned in the notification. The exemption applies to the category of service rendered, not the category of the person providing the service. Therefore, the supply of services mentioned in the notification is exempt regardless of the person involved.B.2 Conclusion on Applicability:The services provided by the applicant under 'healthcare services' fall under serial no. 74 of the notification and are exempt from GST. The notification applies to the services provided, irrespective of the LLP's involvement.Order:1. The services rendered by the applicant are classified under 'healthcare services' and fall under serial no. 74 of the table appended to Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 (as amended), classified under Service Code (Tariff) 9993.2. Notification No. 12/2017-Central Tax (Rate) exempts the supply of services mentioned therein, irrespective of the person involved in providing the same.