2021 (2) TMI 196 - AAR - GST

Medical Doctor Liable for GST Registration under CGST Act: Exemptions for Foreign Services

The ruling confirmed that the applicant, a medical doctor, is liable for GST registration under the CGST Act, subject to turnover limits. Services ... Health care services exemption - clinical establishment - intermediary services - place of supply of intermediary services - export of services - constituent conditions - liability for registration under Section 22(1) of the CGST ActLiability for registration under Section 22(1) of the CGST Act - intermediary services - Applicant's liability to be registered under the GST Acts - HELD THAT: - The Authority found that insofar as the applicant supplies business promotion and management services (as per Schedule A of the consulting agreement) he acts as a service provider and, in relation to those supplies, functions as an intermediary arranging or facilitating supplies on behalf of the foreign company. Such supplies render him a taxable person for the purposes of the GST law and therefore liable to registration under Section 22(1) of the CGST Act, subject to the prescribed threshold. The Authority noted that the applicant has in fact obtained registration under the CGST and KGST Acts. [Paras 12]Applicant is liable for registration under the GST Acts (subject to turnover threshold).Health care services exemption - clinical establishment - Tax liability on consultation/diagnostic services (diagnosis and treatment) provided by the applicant to hospitals, laboratories and biobanks (including those located outside India) - HELD THAT: - The Authority held that services by way of diagnosis or treatment rendered by a clinical establishment or an authorised medical practitioner fall within the definition of 'health care services' and are covered by the exemption in Entry No. 74 of Notification No.12/2017-Central Tax (Rate). The applicant's diagnostic and treatment services, being services by way of diagnosis or treatment provided from his clinical establishment, are therefore exempt from GST. This exemption was applied to the diagnostic/treatment services described by the applicant, even where the recipient is a hospital/laboratory/biobank registered outside India, as those services qualify as health care services. [Paras 8, 13]No GST liability on diagnostic and treatment services supplied by the applicant; such services are exempt as health care services.Intermediary services - place of supply of intermediary services - export of services - constituent conditions - Tax liability on business promotion/management services rendered by the applicant to the foreign company - HELD THAT: - The Authority examined Schedule A and concluded that the services relating to developing clinical centres, managing tissue procurement projects, processing and analysis, and related management activities are management/business promotion services and not health care services. The agreement demonstrates that the applicant acts as an agent/facilitator for the foreign company, bringing the supplies within the definition of an 'intermediary.' Under Section 13(8) of the IGST Act, the place of supply of intermediary services is the location of the supplier (India). Consequently the place of supply is India and the supplies do not satisfy the conditions for 'export of services' (the place of supply is not outside India). Therefore these intermediary/business promotion services are taxable under the GST Acts. The Authority further identified the applicable rates under the relevant notifications (taxable under SAC 9983 at the prescribed rates). [Paras 9, 10, 11]Business promotion/management services supplied by the applicant to the foreign company are taxable (not export of services) and attract GST; the applicant is liable in respect of these supplies.Final Conclusion: The Authority ruled that (i) the applicant is liable for registration under the GST Acts (subject to turnover threshold); (ii) diagnostic and treatment services provided by the applicant from his clinical establishment are exempt from GST as 'health care services'; and (iii) business promotion/management services supplied to the foreign company are intermediary services, have place of supply in India, are not export of services and are taxable under the GST Acts. Issues Involved:1. Eligibility for GST registration.2. Tax liability on services rendered to foreign entities (Hospitals/Laboratories/Biobanks in the USA and other countries).3. Tax liability on Health Care Services rendered in India.Issue-wise Detailed Analysis:1. Eligibility for GST Registration:The applicant, a medical doctor, provides health care services in India and consultancy services to foreign entities. The ruling confirms that the applicant is liable for GST registration under Section 22(1) of the CGST Act, 2017, subject to the threshold limit of turnover. The applicant is already registered under the CGST Act and KGST Act.2. Tax Liability on Services Rendered to Foreign Entities:The applicant provides two types of services to foreign entities:- Consultation Services in Diagnosis and Treatment of Illness: These services are exempt from GST under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as they qualify as 'health care services' provided by a clinical establishment.- Business Promotion Services: These services, including organizing collaborative projects and business development for foreign companies, are classified as Business Promotion Services (SAC 9983). The applicant acts as an intermediary, facilitating services between foreign companies and Indian clinical centers. As per Section 13(8) of the IGST Act, 2017, the place of supply for intermediary services is the location of the supplier (India). Therefore, these services are taxable under GST and do not qualify as 'export of services' because the place of supply is in India.3. Tax Liability on Health Care Services Rendered in India:The diagnostic and treatment services provided by the applicant in India are exempt from GST under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. This exemption applies to health care services offered by a clinical establishment, authorized medical practitioner, or paramedics.Ruling:1. The applicant is liable for registration under the GST Acts.2. There is no tax liability on diagnostic and treatment services rendered to foreign entities (Hospitals/Laboratories/Biobanks in the USA and other countries). However, business promotion services rendered as per the contract are taxable under GST.3. Diagnostic and treatment services, as well as part-time medical services provided in India, are exempt from GST.