Composite health care supply exemption covers inpatient hospital packages, while corporate occupational health check-ups remain taxable.

Medicines, surgical items, implants, consumables, allied items, food and room rent supplied to in-patients were treated as naturally bundled with diagnosis, treatment, nursing care and other hospital services, so the inpatient package was a composite supply with health care service as the principal supply and was exempt from GST. Occupational health check-up services, ambulance facility and allied medical services supplied to business entities for employees were held to be different from diagnosis or treatment of a patient; because they were provided for corporate purposes rather than as health care to a patient, they did not fall within the exemption and were taxable.

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Issues: (i) Whether medicines, surgical items, implants, consumables, allied items, food and room rent supplied to in-patients form a composite supply of health care service and are exempt from GST; (ii) Whether occupational health check-up services, ambulance facility and allied medical services supplied to business entities for employees fall within exempt health care services.

Issue (i): Whether medicines, surgical items, implants, consumables, allied items, food and room rent supplied to in-patients form a composite supply of health care service and are exempt from GST.

Analysis: The supply to in-patients was held to be naturally bundled with diagnosis, treatment, nursing care and other hospital services. Applying the definition of composite supply, health care service was treated as the principal supply and the ancillary items supplied during inpatient treatment were regarded as integral to the overall medical treatment. The exemption for health care services by a clinical establishment, together with the clarifications on room rent and food supplied to in-patients, supported the view that the entire inpatient package falls within the exempt service.

Conclusion: Yes. The supply to in-patients is a composite supply of inpatient health care service and is exempt from GST.

Issue (ii): Whether occupational health check-up services, ambulance facility and allied medical services supplied to business entities for employees fall within exempt health care services.

Analysis: Occupational health check-up was held to be different from diagnosis, treatment or care for illness, injury, deformity, abnormality or pregnancy. The service was characterised as a corporate health check-up arrangement undertaken for the employer's business purposes and not as treatment of a patient. Since the recipient of the service was the business entity and the activity was not covered by the exemption for health care services, it was classified as taxable human health and social care service.

Conclusion: No. Occupational health check-up services supplied to business entities are taxable and do not qualify as exempt health care services.

Final Conclusion: The ruling grants exemption for inpatient hospital supplies as part of composite health care service, but holds occupational health check-up services for corporate clients to be taxable.

Ratio Decidendi: Supplies that are naturally bundled and ancillary to inpatient diagnosis and treatment form a composite supply of health care service and inherit its exemption, but corporate occupational health check-up services are not health care services because they are not rendered for diagnosis or treatment of illness in a patient.

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