TaxTMI 
TaxTMI 
2021 (3) TMI 547
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....ated Cardiac Unit with 'State of Art' Cath-Lab (Vascular Capabilities) with dedicated 10 Cardio ICU beds • The unit is NABH Accredited • Key Specialties of this unit: Cardiology, Orthopedics, Laparoscopy, • Gynecology, Ophthalmology, General Surgery, General Medicine, • Oncology, Neurology & Critical Care & other speciality services • No of Consultants / Doctors: More than 100 (including visiting) • No. of Operational Beds: 120 Surat Hospital: • Largest Corporate Multi-Specialty Hospital in Surat was operationalized in 2014. • This unit is having dedicated Cardiac Unit with 'State of Art' Cath-Lab • The unit is NABH Accredited • Key Specialties: Cardiology, Orthopedics, Joint Replacement, Arthroplasty, Gastroenterology, Gynecology, General Surgery, General Medicine & Critical Care & other speciality services • No of Consultants / Doctors: More than 100 (including visiting) • No. of Operational Beds: 150 Baroda Hospital: • Promoter doctors started practice from this unit in 1988 • Stron....
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....t effective way for offering the very best in private healthcare. • They provide the highest standard of clinical skills and nursing care across an extensive range of specialties and attract world-class doctors and surgeons from the leading hospitals. • The hospital offers a convenient location for patients and their visitors and is one of the fastest growing chains of multispecialty hospitals in South Gujarat. • Delivering a wide-ranging array of medical services, we offer inpatient, outpatient, day care treatment, Surgery, emergency & trauma care in the surroundings. • There are various specialty and super-specialty departments within the hospital. All these departments run daily. At any given time of the day, the patient can meet the specialist doctor and seek advice. The doctors are eminent practitioners who have a standing with the community. • Medications being an integral part of therapy, the statutory regulations for scheduled drugs, quality, storage and administration are considered vital parameters for treatment. The mission of the pharmacy is to provide medications, other health care products, relevant info....
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....ical treatment. As far as, an inpatient (IPD) is concerned, the Applicant is expected to provide lodging, care, medical treatments, medicines food, other allied items & services as a part of treatment under supervision till discharge from the hospital. Inpatients (IPD) receive medical facility as per the scheduled procedure and have strict restriction to ensure quantity / quality of items for consumption. • The hospital owns and runs a pharmacy. During the course of treating the in-house patients admitted in the hospital medicines, surgical items, implants, consumables and allied items are used. For proper care and watch by doctors/ nurses a room on rent and food from hospital canteen are provided to the in-house patients as a part of overall health care. • Medicine or allied goods dispensed to inpatient are essential items and your Applicant believes it to be a composite supply to facilitate health care services. Hence, the medicines dispensed to inpatients are incidental to the health care services rendered to the patient by the hospital. The Applicant believes that the healthcare services provided by hospital are exempt vide Notification No. 12/2017-CT(....
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....treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases." It is submission of the applicant that the health care services provided by a clinical establishment, an authorized medical practitioner or Para-medics are exempted vide Serial No.74 of Notification No.12/2017-Central Tax (Rate) dated 28th June, 2017. (Copy of Relevant portion of the notification is enclosed) • Further, the Government of India vide Circular No.27/01/2018-GST dated 04/01/2018 has clarified that room rent in hospital is exempted. (Copy of the said circular is enclosed herewith) • Further, the clarifications issued based on the approval of 25thGST Council Meeting held on 18-01-2018 [F.No.354/17/2018-TRU Dt.12-02-2018], clarifying that food supplied to the in-patients, as advised by the doctor/nutritionist, is a part of composite supply of health care and not separately taxable. (Copy of the said clarification is attached) • The Applicant is of the view that the medicines....
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....t the time of personal hearing held through Video Conferencing on 24.09.2020, the Authorised Representative of the applicant, CA Dhruvank Parikh reiterated the facts as stated in the application and as mentioned herein above and submitted additional submission as below: (i) They submitted the copy of invoices being prepared by the Applicant towards supply of Health Care services to the IPD Patients. (ii) Further with respect to the second question, the Applicant submitted that till date, no such agreements have been entered into but the same is the proposed activity of the Applicant and, hence, the applicant craves a leave for non - submission of any agreement as being asked for at the time of personal hearing. But the Ruling is quite essential to know the taxability of the same as the same is being proposed to be carried out by the Applicant. (iii) As regard the Nature of OHC services, they submitted that the companies operating in different sector consists of diverse industries producing different products and services. Many of such industries have machinery & objects that are harmful to individuals if exposed for a longer period of time, hence, it is i....
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....cy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases'. (ix) The back ground of the same is evident from the Finance Act, 1994 wherein vide Notification No.24/2010-STdated 22ndJune, 2010, service tax was made applicable vide Section 65(105)(zzzzo) of the Finance Act, 1994 by providing that "Taxable service" means any service provided or to be provided by any hospital, nursing home or multi-specialty clinic,- (i) to an employee of any business entity, in relation to health check-up or preventive care, where the payment for such check-up or preventive care is made by such business entity directly to such hospital, nursing home or multi-specialty clinic; or (ii) to a person covered by health insurance scheme, for any health check-up or treatment, where the payment for such health check-up or treatment is made by the insurance company directly to such hospitals, nursing home or multi- specialty clinic." (x) Subsequently in exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994....
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....Care Services' which holds true in case of the proposed activity of the Appellant, and ii.) The said Health Care Services must be supplied by either the Clinical Establishment or authorized medical practitioner or para-medics. Even this condition is being satisfied in the proposed activity as the Applicant is a Clinical Establishment who is going to carry out the impugned proposed activity. (xiv) Thus, Health care services are exempt from service tax for the period post negative list 01.07.2012. Health care services were selectively taxed for the period 01.07.2010 to 01.05.2011 and thereafter, health care services were exempt from service tax. Post negative list regime with effect from 01.07.2012, health care services rendered by clinical establishments are totally exempt as provided herein above. ln such circumstances, the Appellant believes that if the answer to this question is answered in negative it will defeat the entire purpose of granting exemption to the Health Care Services. Even when the contract is proposed to be made with a Corporate Entity for carrying our medical check-up of their employees, the nature of activity is not going to be changed and ....
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....e Applicant has also submitted that the Occupational Health Check-up services (OHC) are also provided by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital's payroll working in different corporate for providing health check-up service along with ambulance facility, and allied medical services to their employees. They also conduct the camps for health check-up outside the hospitals. 7. In view of the above, they have raised two questions before this authority which are taken up one by one for discussion, as below:- Question No.1: Whether the supply of medicines, surgical items, implants, consumables and other allied items provided by the hospital through their hospital in house pharmacy, as well as food, room on rent, other services to the in-patients is part of composite supply of health care treatment; and hence not taxable under CGST/SGST? 7.1 The applicant has a multi-specialty hospital providing health care services to both out-patients and in-patients. The in-patients are provided with stay facilities, medicines, consumables, surgical implants, dietary food and other surgery items required for treatment. During the course of such treatment a....
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....of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply." 7.3 This view is strengthened by the Circular No.32/06/2018-GST dated 12.02.2018, which is reproduced below: Sr.No. Issue Clarification 5 Is GST leviable in following cases: (1) --------- (2) Retention money: Hospitals charge the patients, say, Rs. 10000/- and pay to the consultants/ technicians only Rs. 7500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc. Will GST be applicable on such money retained by the hospitals? (3) Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable....
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....ces, including radiological and anaesthesiological services, etc." Thus, Inpatient services means services provided by hospitals to inpatients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient and the service comprises of medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services. A complete gamut of activities required for well-being of a patient and provided by a hospital under the direction of medical doctors is a composite supply of service and is covered under 'Inpatient services' classifiable under SAC 999311. 7.5 Health care services provided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide Sl. No 74 of the Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 as amended. For ease of reference, the relevant entry is given below: SI.No. Chapter, Section, Heading. Group or Service Code (Tariff) Description of Services Rate (per cent.) Condition (1) (2) (3) (4) (5) 74 Heading 9993 Services by way of- (a) health care services by a clinical establish....
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.... on the approval of 25th GST Council Meeting held on 18-012018 [F.No.354/17/2018-TRU Dt.12-02-2018], is proper. The relevant text of the Circular No. 27/01/2018-GST dated 4.1.2018, which amply clarifies that room rent is exempted under Notn. No. 22/2017 CT(Rate), is reproduced under for ease of reference: S.No. Questions/Clarifications sought Clarifications 4 1. Whether for the purpose of entries at Sl. Nos. 34(ii) [admission to cinema] and 7(ii)(vi)(viii) [Accommodation in hotels, inns, etc.], of notification 11/2017-C.T. (Rate), dated 28th June, 2017, price/declared tariff includes the tax component or not? 2. Whether rent on rooms provided to in-patients is exempted? If liable to tax, please mention the entry of CGST Notification 11/2017-C.T. (Rate) 3. What will be the rate of tax for bakery items supplied where eating place is attached - manufacturer for the purpose of composition levy? 1. Price/declared tariff does not include taxes. 2. Room rent in hospitals is exempt. 3. Any service by way of serving of food or drinks including by a bakery qualifies under section 10(1)(b) of CGST Act and hence GST rate of composition levy for the same would be 5....
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.... commonly known as corporate health check-up schemes, are undertaken by designated hospitals in order to detect any medical indicator or to ensure timely diagnosis of any disease so that prophylactic measures can be taken. In such cases, the hospital providing these services, charge the employer i.e. the business organization and it constitutes expenditure for the latter. 13. In this regard, the applicant submitted that they believe that if the answer to this question is answered in negative it will defeat the entire purpose of granting exemption to the Health Care Services. Even when the contract is proposed to be made with a Corporate Entity for carrying our medical check-up of their employees, the nature of activity is not going to be changed and should equally be treated at par with Health Care services provided in Clinical Establishment as the place of rendering services is not vital. Thus, the words 'diagnosis,' and 'care' under the Healthcare service under Entry No.74 of Notification No.12/2017-CT (Rate) are broad enough to include the Occupational Health Check Up Facilities as well which are provided by a clinical establishment, an authorised medical prac....
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....te treatment as and when required which may involve getting ambulance services in case patient needs ICU or Ventilator or immediate hospital admission and other allied medical services. e) to establish that employees are able to return to work after a prolonged absence for health reasons. f) to establish the conditions under which employees with illnesses, injuries or disabilities are able to continue working. The above narration indicates that the primary purpose of Occupational Health Check-up is: i) Whether the person is fit for employment to the particular post ii) Prevention of work related injuries, diseases and potential health hazards. iii) Monitoring the health status of the employees iv) Arrangement of treatment if the need arises v) Checking of fitness of the employee for the purpose of resumption to duty vi) Assessment of the work conditions with a view to ascertain that a particular employee can work under such conditions or otherwise. 15.2 The above activities are by no stretch of imagination covered under the scope of 'healthcare services' as defined above. Thus, the "health care services" do ....