Clinical Key medical database subscription services to educational institutions not exempt from GST under Entry 69(b)(v)

AAR Karnataka ruled that Clinical Key subscription services to AIIMS are not exempt from GST under Entry 69(b)(v) of Notification 9/2017-IT(Rate). The service constitutes online access to a medical database rather than supply of educational journals/periodicals, despite AIIMS qualifying as an educational institution. For GST liability, AIIMS must discharge GST for periods up to 30.09.2023 and from 01.10.2023 onwards as it receives OIDAR services for business purposes and holds GST registration. The exemption similarly does not apply to other educational institutions receiving Clinical Key services.

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Issues Involved:
1. Exemption of GST on subscription services to AIIMS.
2. GST liability on subscription services to AIIMS for periods up to and after 30 September 2023.
3. Exemption of GST on subscription services to other educational institutions.

Summary:

Issue 1: Exemption of GST on Subscription Services to AIIMS
The applicant sought an advance ruling on whether the supply of services (subscription of Clinical Key) to the All India Institute of Medical Sciences (AIIMS) is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017. The Clinical Key service is an online subscription-based clinical database with search and navigation facilities. The Authority ruled that the supply of Clinical Key does not qualify as "supply of online educational journals or periodicals" because it is a composite supply involving several constituents beyond just journals or periodicals. Therefore, the supply of services to AIIMS is not exempt from GST under the specified entry.

Issue 2: GST Liability on Subscription Services to AIIMS for Periods Up to and After 30 September 2023
The applicant questioned whether they or AIIMS need to discharge the GST liability for the periods up to 30 September 2023 and after 01 October 2023. The Authority examined Section 14 of the IGST Act, which specifies that the supplier located in a non-taxable territory is liable to pay GST on OIDAR services supplied to a non-taxable online recipient (NTOR). Up to 30 September 2023, AIIMS did not qualify as an NTOR as it received services in relation to business. Therefore, AIIMS, being the importer of services, is liable to discharge GST for the period up to 30 September 2023. For the period after 01 October 2023, AIIMS, being GST registered, is liable to discharge GST liability.

Issue 3: Exemption of GST on Subscription Services to Other Educational Institutions
The applicant sought to know whether the supply of services (subscription of Clinical Key) to other educational institutions is exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017. The Authority ruled that the exemption is applicable only to the "supply of online educational journals or periodicals." Since the applicant provides a composite service of online access and retrieval to a clinical/medical database, it does not qualify for the exemption under the specified entry.

Ruling:
a) The supply of services (subscription of Clinical Key) to AIIMS is not exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017.
b) The applicant is not liable to discharge GST liability for the supply of services to AIIMS for both periods. AIIMS, as the importer of services, is liable to discharge GST.
c) The supply of services (subscription of Clinical Key) to other educational institutions is not exempt from GST under Entry No. 69(b)(v) of the Notification No. 9/2017-IT (Rate) dated 28 June 2017.

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