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of <h1>Hospital Supplies to In-Patients Deemed 'Composite Supply' Exempt from Tax</h1> <h3>In Re: M/s. Starcare Hospitals Kozhikode Private Limited</h3> In Re: M/s. Starcare Hospitals Kozhikode Private Limited - 2019 (24) G.S.T.L. 802 (A. A. R. - GST) Issues:1. Whether the supply of medicines, consumables, surgical items, etc., used in providing health care services to in-patients qualifies as a 'Composite Supply' eligible for exemption under health care services.Analysis:The case involved a hospital providing medical services to patients categorized as in-patients and out-patients. The in-patients received various facilities including accommodation, medicines, consumables, implants, and dietary foods necessary for treatment. The hospital sought an advance ruling on whether supplies like medicines, consumables, surgical items, etc., provided to in-patients could be considered a 'Composite Supply' eligible for exemption under health care services.The hospital's central pharmacy supplied medicines and consumables to in-patient outlets and out-patient pharmacy separately. In-patients received lodging, medical care, medicines, and food as part of their treatment until discharge. The hospital argued that medicines supplied to both in-patients and out-patients were incidental to health care services and exempt from GST. It was highlighted that without these supplies, proper health care services could not be provided to in-patients, making them essential components of the treatment.Upon examination, it was noted that in-patients were admitted for treatment under continuous monitoring by medical staff. The treatment protocols were closely followed, and invoices billed for in-patients included charges for various services and facilities utilized during the hospital stay. The hospital's provision of a bundle of supplies to in-patients was classified as falling under health care services, making them eligible for exemption under the relevant notification.The ruling clarified that the supply of medicines, consumables, surgical items, etc., to in-patients for diagnosis or treatment constituted a 'Composite Supply.' These supplies were deemed essential for providing health care services to in-patients, with treatment being the principal supply and other items being ancillary. Therefore, such supplies were considered eligible for exemption under the specified category of health care services as per the relevant notification.In conclusion, the judgment affirmed that the supplies provided to in-patients, including medicines, consumables, surgical items, etc., were integral to health care services and constituted a 'Composite Supply' eligible for exemption under the applicable tax regulations.
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