Taxability of hospital lease rent upheld as exempt healthcare services did not extend to commercial premises or a fresh refund claim

Rent paid for premises leased by a hospital remained taxable under the notified category of renting of immovable property, even though the hospital's healthcare services were exempt; the residential dwelling exemption did not apply to commercial hospital premises, so the challenge on taxability failed. The appellate authority also held that a claim for input tax credit refund and the applicability of Rule 89 could not be raised for the first time in appeal because no ruling had been sought on that issue before the lower authority; that claim was therefore not entertainable and was rejected. The advance ruling was upheld in full.

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Issues: (i) Whether GST was leviable on the rent paid or payable for premises taken on lease by a hospital providing exempt healthcare services. (ii) Whether the appellate authority could decide the claim regarding input tax credit refund and the applicability of Rule 89 when that issue was not sought before the advance ruling authority.

Issue (i): Whether GST was leviable on the rent paid or payable for premises taken on lease by a hospital providing exempt healthcare services.

Analysis: The outward healthcare services were exempt supplies, but renting of immovable property for use as a hospital remained a taxable service under the rate notification. The notifications applicable to central and State GST prescribed tax on renting in relation to immovable property at the notified rate, and the exemption for residential dwelling did not cover the appellant's commercial hospital premises.

Conclusion: GST was leviable on the lease rent, and the challenge to the advance ruling on this point failed.

Issue (ii): Whether the appellate authority could decide the claim regarding input tax credit refund and the applicability of Rule 89 when that issue was not sought before the advance ruling authority.

Analysis: The appellate authority's power under section 101 was confined to confirming or modifying the ruling appealed against. Since no ruling had been sought before the advance ruling authority on input tax credit refund or Rule 89, the issue could not be raised for the first time in appeal and was outside the authority's consideration.

Conclusion: The claim regarding input tax credit refund and Rule 89 was not entertainable in appeal and was rejected.

Final Conclusion: The advance ruling was upheld in full, and the appeal failed on both the taxability of rent and the attempted introduction of a fresh refund issue.

Ratio Decidendi: Rent for leased premises used in providing exempt healthcare services is taxable when the service falls within the notified category of renting of immovable property, and an advance ruling appeal cannot be used to introduce a new issue not raised before the authority below.

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