Hospital healthcare services to employees and non-employees exempt from GST under exemption notification

The AAR, Jharkhand ruled that healthcare services provided by a hospital to both employees and non-employees are exempt from GST. Services to employees and dependents under employment contracts are not subject to GST as they constitute employment benefits. For non-employees, doctor consultancy, tests/scans, admission/bed/operation charges, medicine dispensation to in-patients and other patients, and preventive health check-ups all qualify as healthcare services under the GST exemption notification, making them non-taxable despite medicines being generally taxable supplies.

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Issues Involved:
1. Taxability of Doctor's Consultancy under GST.
2. Taxability of Tests and Scans under GST.
3. Taxability of Admission Charges, Bed Charges, Operation Charges, Sundry Charges, etc., under GST.
4. Taxability of Medicine Dispensation to In-Patients under GST.
5. Taxability of Medicine Dispensation to Other Patients under GST.
6. Taxability of Preventive Health Check-up under GST.

Detailed Analysis:

1. Taxability of Doctor's Consultancy:
The applicant sought to determine whether Doctor's Consultancy provided to various categories of people is taxable under GST. The ruling concluded that Doctor's Consultancy services provided in the hospital for diagnosis, treatment, or care for illness or injury fall under the definition of "Health Care Services" and are accordingly not chargeable to GST.

2. Taxability of Tests and Scans:
The applicant inquired about the taxability of Tests and Scans for IPD and OPD cases. The ruling clarified that these services are integral to the diagnosis, treatment, or care for illness or injury. Consequently, they fall under "Health Care Services" and are not subject to GST.

3. Taxability of Admission Charges, Bed Charges, Operation Charges, Sundry Charges, etc.:
The applicant sought clarification on whether these charges are taxable under GST. The ruling stated that these charges are directly linked to the treatment of illness or injury and, as such, fall under "Health Care Services." Therefore, they are exempt from GST.

4. Taxability of Medicine Dispensation to In-Patients:
The applicant questioned the GST applicability on medicine dispensation to in-patients. The ruling affirmed that this service is part of the treatment or care for illness or injury, thus falling under "Health Care Services" and exempt from GST. The ruling further clarified that if considered separately, medicine dispensation could be seen as a composite supply where the principal supply is health care services, which are exempt from GST.

5. Taxability of Medicine Dispensation to Other Patients:
The applicant sought clarity on the taxability of medicine dispensation to other patients. The ruling concluded that this service, following a doctor's consultation, is part of the treatment or care for illness or injury. It falls under "Health Care Services" and is not chargeable to GST.

6. Taxability of Preventive Health Check-up:
The applicant inquired about the taxability of preventive health check-ups. The ruling stated that preventive health check-ups are preliminary investigations for diagnosing illness, thus falling under "Health Care Services" and exempt from GST.

Conclusion:
The Advance Ruling Authority concluded that all the services provided by the applicant, including Doctor's Consultancy, Tests and Scans, Admission Charges, Bed Charges, Operation Charges, Sundry Charges, Medicine Dispensation to In-Patients and Other Patients, and Preventive Health Check-ups, fall under the category of "Health Care Services" and are exempt from GST as per Notification No. 12/2017-Central Tax (Rates) and Circular No. 32/06/2018-GST.

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