TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 837
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....proceedings was continued till 6-6-19. 2. Many discrepancies including medicines, consumables and implants administered to in-patient has considered as composite supply by the hospital and claimed exemption as health care service, were noticed during search proceedings. Considering all these discrepancies, GST DRC-01A -Part A was issued to the hospital for the period of 1-7-17 to 31-5-19 vide ref. No. 858,859 and 860 dated 11-2-20. 3. Hospital had sought advance ruling on dated 2-12-2020 before the Advance Ruling Authority and Advance Ruling Authority had pronounced the Ruling on 20.01.2021. 4. Therefore, it is bring to your kind notice that the proceeding is already pending in the given case before application is filed with Authority of Advance Ruling. Personal Hearing: 3. Shri Nilesh Suchak, CA Appeared on 15-6-21, Virtual meeting and reiterated the contents of the applicant's submission dated 14-6-21. 4. The applicant vide letter dated 14-6-21 has submitted that according to their bona fide belief, they have not obtained the ruling by fraud or suppression of material facts or misrepresentation of facts and hence the Advance Ruling pronounced in their case after followin....
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....arat GST Act, 2017 and hence the declaration made by them based on their bona fide belief based on this CBEC Circular is absolutely correct and there is no suppression of material facts on their part. 7. In terms of Section 73 and 74 of the CGST Act,2017 no show cause notice has been issued till date, therefore the allegation of suppression of facts in unfounded and without substance. The Enforcement Department even though has issued the intimation request to pay tax ascertained by them vide letter dated 11-2-2020. 8. The application for advance ruling was filed by them on 2-12-20 and having not raised any issue of pending proceedings before the Hon'ble AAR by the time of pronouncement of ruling, it cannot now be alleged that they have suppressed information from the Hon'ble AAR to obtain the ruling. 9. The issue on which ruling is given in their case is no more res integra and the same has been ruled by a catena of ruling some of which are given below for ready reference : Ernakulam Medical Centre Pvt. Ltd. Advance Ruling No. KER/16/2018 Dt. 19.09.2018 [2018 (18) GSTL 142 (AARGST)] KIMS Healthcare Management Ltd. Advance Ruling No. KER/17/2018 Dtd. 20.10.2018 [2018 (18) ....
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....me adjudication proceedings which may include assessment proceedings, proceedings for penalties etc., proceedings for demands and recovery under Section 73 and 74 etc." 13. They draw kind attention to provisions of section 73(8) and Section 74(8) of the CGST Act, 2017 as also of Gujarat GST Act, 2017 wherein it states that all the proceedings in respect of the said notice shall be deemed to be concluded on payment of sums specified therein. This also supports our contentions as clarified by CBIC that "the Show Cause Notice is the starting point of any proceedings against the party." FINDINGS : 5. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and GGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the GGST Act. 6. The issue before us is whether said Advance Ruling dated 20-1-21 may be declared Void Abinitio under Section 104, CGST Act or otherwise. The State Revenue contests that ....
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.... to be a "judicial proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code. Thereby we hold that subject inquiry initiated under Section 70(1) of the SGST Act 2017 is a judicial proceeding. 12. In GST Act, 'Proceedings' is not defined. As per the Google, in taxation the meaning of "Proceedings" is "any audit, examination, investigation, claim, contest, dispute, litigation or other proceeding with respect to Taxes or by or against any Taxing Authority". In view of the above, meaning of the term 'proceeding' is a very comprehensive term and generally speaking means a prescribed course of action for enforcing a legal right and hence it necessarily embraces the requisite steps by which a judicial action is invoked. The process of investigation in tax administration culminates in issuance of a show cause notice which is then adjudicated. Investigation is activated when there is enough predication to show that there is an alleged tax evasion. The essence of investigation is to carry out an in-depth review of the taxpayer's records and activities to ensure that the tax due to the Government is not lost in evasion. Therefore, commencement of investigation i....
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....n below: The Grounds and quantification are attached/ given below: Year Particular Tax Interest Penalty Total CGST ACT SGST Act CGST ACT SGST Act CGST ACT SGST Act July-17 to March-18 Income of Liquidated Damages 818114 818114 355638 355638 818114 818114 3983732 Miscellaneous Charges income 431397 431397 221263 221263 431397 431397 2168114 Preventive Health Check-up-Income 655411 655411 351520 351520 655411 655411 3324684 Income from Nursing Centre 1099392 1099392 576132 576132 1099392 1039992 5549832 Net Pharmacy Income-Within Package 2579655 2579655 3227823 3227823 2579655 2579655 16774266 Net Pharmacy Income-Outside Package 371290 371290 449366 449366 371290 371290 2383892 Net Implant Income-Within Package 974719 974719 2336441 2336441 974719 974719 8571758 6929978 6929978 7518183 7518183 6929978 6929978 42756278 *Interest is calculated @24% till 10/02/2020. Hospital has to calculate it till date of payment- (a) Grounds Following non compliances of various provisions of GGST Act, 2017, CGST Act, 2017 and rules made thereunder are identified during the inspection: * Income of Liquida....
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....s+ equipment (stent/implant) to the patients. If extra pharmacy/equipment Is administered by the Hospital as per the need of the patients thon it Is charged extra in the bill. Bill is generated for package and Whatever extra 15 charged which is shown separately from package amount. Hospital is not paying GST on pharmacy included in package and whatever extra amount of pharmacy it has charged. Whatever pharmacy/equipment is administered to the patients Is as per the need of the patients so it is contingent in nature and can be considered as mixed supply. Section 65 of The Drugs and Cosmetics Rules, 1945 makes it mandatory to Hospital to separately maintain records of drugs/pharmacy it administers to patients so it is separately Identifiable independent supply. Hospital is charging pharmacy at MRP price to the patients. MRP includes tax component too, Pharmacy is taxable item and as tax is not charged on the value of that component, GST liability arise to that extent. Calculation shown in above table (both for within package and outside package) has given due credit of tax involved in purchase. * Not Pharmacy income-Outside Package: In Other cases where patients have not opted for....
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....ny submissions against the above the same may be furnished by 25/02/2020 in Part B of this Form. (Jagruti R. Gohil) Assistant Commissioner Of State Tax(2) Enforcement & Co-ordination Gujarat State, Ahmedabad Annexure - A FORM GST DRC-01A Intimation of tax ascertained as being payable under section 74(5) [See Rule 142 (1A)] Part A No.: Add. SGST/DC. Enf/67/Shalby/SCN/2019-200. No.859 dated 11.12.2020 To GSTlN-24AAICS5593B1ZC Shalby Ltd 976 PAIKI 6, Shalby Hospital OPP KARNAVATI CLUB, S. G. HIGHWAY Ahmedabad. Gujarat-380015 Sub.: Case Proceeding Reference No. - Intimation Of liability under section 73(5)/section 74(5) - reg. F. Y.2017-18 Please refer to the above proceedings. In this regard, the amount tax/interest/penalty payable by you under section 7345) / 74(5) with reference to the said case as ascertained by the undersigned in terms of the available information, as is given below: The Grounds and quantification are attached/ given below: Year Particular Tax Interest Penalty Total CGST ACT SGST Act CGST ACT SGST Act CGST ACT SGST Act April-18 to March-19 Income of Liquidated Damages 23381 23381 7998 7998 23381 2....
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....t recovers amount from corporates for the service it renders to them. Such services provided to the corporates are taxable service and within the scope of supply as per Sec. 7 hence it is liable to tax. As hospital has not paid GST on it, tax dues are ascertained as per above table. * Income from Nursing Centre: Hospital had booked income from nursing centre as income receivable on 30/09/2017 and 31/12/2017 respectively on which it appears that GST is not paid. Same is essentially income from training centre. Same is taxable service hence it is subject to GST. As hospital has not paid GST on it, tax dues are ascertained as per above table. * Net Pharmacy income-Within Package: Hospital is providing various surgery related procedure to the indoor patients and for it, it has developed package too. But, it is optional. In package model, Hospital is giving specified service (room rent/doctor fees etc.) + certain pharmacies+ equipment (stent/implant) to the patients. If extra pharmacy/equipment Is administered by the Hospital as per the need of the patients thon it Is charged extra in the bill. Bill is generated for package and Whatever extra 15 charged which is shown separately f....
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.... and can be considered as mixed supply. Section 65 of The Drugs and Cosmetics Rules, 1945 makes it mandatory to Hospital to separately maV1tain records of drugs/pharmacy/it administers to patients. In implant case, separate sticker vise tracking is possible for warranty and such purpose so it is separately identifiable independent supply. Hospital is buying implant with tax charged on it. Implant is taxable item and as tax is not charged on the value of that component whether included package or separately charged, GST liability arise to that extent. Calculation shown in above table (both for within package and outside package) has given due credit of tax involved in purchase. You are hereby advised to pay the amount of tax as ascertained above along the amount of applicable interest and penalty under section 74(5) by 25/02/2020, failing which Show Cause Notice be issued under section 74(1). In case you wish to file any submissions against the above the same may be furnished by 25/02/2020 in Part B of this Form. (Jagruti R. Gohil) Assistant Commissioner Of State Tax(2) Enforcement & Co-ordination Gujarat State, Ahmedabad FORM GST DRC-01A Intimation of tax as....
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....oyees for job suitability as per corporates' instruction, regular health check-up and various other services to Corporates. It recovers amount from corporates for the service it renders to them. Such services provided to the corporates are taxable service and within the scope of supply as per Sec. 7 hence it is liable to tax. As hospital has not paid GST on it, tax dues are ascertained as per above table. * Net Pharmacy income-Within Package: Hospital is providing various surgery related procedure to the indoor patients and for it, it has developed package too. But, it is optional. In package model, Hospital is giving specified service (room rent/doctor fees etc.) + certain pharmacies+ equipment (stent/implant) to the patients. If extra pharmacy/equipment Is administered by the Hospital as per the need of the patients thon it Is charged extra in the bill. Bill is generated for package and Whatever extra 15 charged which is shown separately from package amount. Hospital is not paying GST on pharmacy included in package and whatever extra amount of pharmacy it has charged. Whatever pharmacy/equipment is administered to the patients Is as per the need of the patients so it is conti....
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....ing is possible for warranty and such purpose so it is separately identifiable independent supply. Hospital is buying implant with tax charged on it. Implant is taxable item and as tax is not charged on the value of that component whether included package or separately charged, GST liability arise to that extent. Calculation shown in above table (both for within package and outside package) has given due credit of tax involved in purchase. You are hereby advised to pay the amount of tax as ascertained above along the amount of applicable interest and penalty under section 74(5) by 25/02/2020, failing which Show Cause Notice be issued under section 74(1). In case you wish to file any submissions against the above the same may be furnished by 25/02/2020 in Part B of this Form. (Jagruti R. Gohil) Assistant Commissioner Of State Tax(2) Enforcement & Co-ordination Gujarat State, Ahmedabad 15. We find that State Revenue has issued three FORM DRC-01 Part-A all dated 11-2-20 under Rule 142(1A) of SGST Rules, 2017 "Intimation of tax ascertained as being payable under section 74 (5)". The Form DRC-01A Part A prescribed under the said Rule is mandatory before service of Show Ca....