Health care exemption for overseas HLA typing services confirmed where diagnostic testing supported stem cell transplantation treatment.

HLA typing services received from an overseas laboratory were treated as laboratory testing services rendered for consideration, but they also qualified as health care services because the testing was an integral diagnostic step in stem cell transplantation treatment. The overseas laboratory was regarded as a clinical establishment as it carried out diagnostic or investigative services, bringing the supply within the exemption for health care services by a clinical establishment under Notification No. 12/2017-Central Tax (Rate). As the underlying supply was exempt from IGST, no liability arose on the recipient under reverse charge. The separate place of supply contention was not examined.

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Issues: Whether HLA typing services received from an overseas laboratory constituted health care services provided by a clinical establishment and were therefore exempt from IGST, with no liability on the recipient under reverse charge.

Analysis: The HLA typing services were held to be a supply of laboratory testing services rendered against consideration. The definition of health care services in Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 covers services by way of diagnosis or treatment or care for illness, injury, deformity or abnormality. The testing was found to be an integral diagnostic step for identifying suitable donors for stem cell transplantation in the treatment of blood cancer and related disorders. The overseas laboratory was also treated as a clinical establishment because it carried out diagnostic or investigative services. On that basis, the services fell within the exempt entry for health care services by a clinical establishment. Since the underlying service was exempt, liability under the reverse charge notification did not arise. The separate contention based on place of supply was not examined.

Conclusion: The HLA typing services were exempt from IGST as health care services provided by a clinical establishment, and the applicant was not liable to pay tax under reverse charge.

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