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.

[KASTURI SETHI]

It is a composite supply. In this scenario, the issuance of invoice separately for lenses can notalter the character of composite supply. Still it conforms to the definition of composite supply provided under Section 2(30) of CGST Act. Both are naturally bundled. The term 'naturally bundled' has not been explained in CGST Act. You can seek help from Education Guide released by Board in Service Tax era.

[ABHISHEK TRIPATHI]

Dear Sir,

This is cataract surgery, right?

Doctor removes the cloudy lens and implants an artificial intraocular lens to restore clear eyesight.

I agree with KS Sir.

Food for thought: But why can't we call it ‘one’ supply of health care treatment? For instance, people go to the doctors bearing in the mind of cataract surgery, perspective of the recipient is the ‘cataract surgery’. Contract should not be broken into several artificial supplies and eventually be called as a composite supply. What I mean is that if I buy a car, it shouldn’t be called as supply of tyres, windshield, music systems etc. etc. It is a single supply of goods i.e., supply of car. Drawing the same analogy, the surgery shouldn’t be supply of medicines, injection, lens etc. etc and thus eventually making composite supply. It is just a single supply of health care treatment.

[Shilpi Jain]

Agree with KS sir. Would not be liable to GST. Can consider issuing a debit note for the lenses instead of another invoice.

AI Summary

Composite supply: separate billing for surgical implants does not change healthcare supply tax character or exemption. Separate invoicing of an intraocular lens for cataract surgery does not change the transaction's character: the lens and the surgical service remain a composite supply of healthcare treatment because the lens is naturally bundled with the principal healthcare service, and separate bills imposed by insurers do not alter its tax treatment; a debit note may be used as a practical billing mechanism.