GST ON DOCTORS FOR SALE OF LENSES

[ROHIT GOEL]

One of our client is an eye surgeon and had charged surgery charges from patient including cost of lenses. Earlier he used to issue invoice of consolidated amount including cost of lens and mentioned as surgery charges in invoice and no breakup of such amount was given in invoice.

Now insurance companies had mandated to provide separate bills for cost of lens and surgery charges to process the claims of patients.

As per advance ruling in the case of Terna Public charitable trust, it is clear that cost of consumables, medicines etc. charged from inpatients will be exempt being composite supply of health care treatment.

Now query is

If invoice of lens and surgery charges are issued separately as required by insurance companies even then it will be considered as composite supply or in such case taxability will change.

AI Summary

Eye surgeon's bundled billing for surgery and lenses classified as composite supply under CGST Act, even with separate invoices. An eye surgeon client charges patients a consolidated fee for surgery, including lens costs, without itemizing the invoice. Insurance companies now require separate billing for lenses and surgery. The query is whether this affects the classification as a composite supply under GST. Respondents agree that even with separate invoices, it remains a composite supply as defined by the CGST Act, since the services are naturally bundled. One suggests issuing a debit note for lenses instead of a separate invoice to maintain the composite supply classification and avoid GST liability.