TaxTMI 
TaxTMI 
2022 (8) TMI 921
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....egistered under GST with GSTIN 33AAQFK1154R1ZT. The applicant has sought Advance Ruling on the following questions: 1. Whether the supply of medicines, drugs and other surgical goods to In-Patients during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? 2. Whether the supply of medicines, drugs and other surgical goods to Out-Patients during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? 3. Whether the supply of Implants, Prosthetics and Mobility aids during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? The Applicant has submitted the copy of application in Form GST ARA - 01 and also submitted a copy of Challan evidencing payment of application fees of Rs.5,000/- each....
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....r each of the services and supply of goods are to be treated as separate supplies. The applicant has however discharged Tax Liability on sale of medicines for both In-Patients and Out-Patients up to December 2020.With Effect from January 2021 onwards, the applicant has relied upon various Court Proceedings and AAR rulings and has decided not to levy GST on Medicines and implants to In-Patients, thereby setting up a separate division for tracking and supplies to In-Patients exclusively under the guise of `KMC Pharma'. 2.3 On interpretation of law, they have referred to the definition of 'Health Care Services' under clause (zg) and Clinical Establishment under clause (s) of Notification 12/2017 CT(rate) dated 28.06.2017. They have stated that as per the above mentioned notification it is noticed that the Health Care Services rendered by them to In-Patients as well as Out-Patients are exempt from payment of GST. The concern in the course of providing health care services also supplies Medicines, consumables and implants for diagnosis or treatment in the hospital. The applicant has submitted that as per Section 8 of the CGST Act, 2017 a composite supply comprising of two....
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.... • In respect of Q.No.2 - The hospital provides diagnosis and treatment to out-patients. Medicines are prescribed to them as part of the treatment and care for illness. The prescribed medicines are provided to the patients from the pharmacy division - "Prabhat Pharma". The patients are expected to undertake supplement of the prescribed medicines and consumables to make such that an appropriate diagnosis and the best possible treatment is provided for. These medicines form an essential part for the patient's recovery for the time being of the illness and the disease. Since these medicines, drugs and other consumables also form part of the health care services, The Applicant is of the view that these supplies are also exempt vide Sl. No 74 of Notification No.12/2017 CT (rate) dated 28.06.2017. • In respect of Q.No.3- Hospital in its course of diagnosis and treatment also includes surgical procedures to be performed on the patients which might include the use of Implants, prosthetics and mobility aids. Pace-Maker, steel plates for fractures, coronary stents are certain implants used in the course of surgical procedures. Wheel Chairs, Crutches and Walkers etc. ....
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....ient bills viz. estimate form, in-patient bill-detailed, pharmacy sale bill, pharmacy sale return bill, discharge summary. • The out-patient (generally requiring care and treatment less than 24 hours) is directly referred to the relevant specialist/doctor. After consultation the out-patient is provided with billing details and prescription note for medicines. They purchase the medicines separately from the pharma located inside the premises (Prabhat Pharma) • 2 copies of sample out-patient bills viz. cash bill, pharmacy bill, prescription note • They have submitted that with regard to practice followed with supporting bills/ invoices prior to January 2021 and after January 2021 that the out-patient billing has not undergone any change and in respect of in-patient bills they have furnished copy of sample in-patient detailed bill, pharmacy sale bill and discharge summary. • They have submitted that generally no transfers are affected from General stores to out- patients and such instances has not yet occurred in the firm till date. In respect of in-patients implants such as stents, pace makers are supplied from General stores to the....
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....disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? 2. Whether the supply of medicines, drugs and other surgical goods to Out-Patients during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? 3. Whether the supply of Implants, Prosthetics and Mobility aids during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of "composite supply" qualifying for exemption under the category of "health care services."? The above questions being on applicability of notification, are found to be falling within the purview of Section 97(2) of the CGST Act, 2017 and are admitted for consideration. 7. The applicant is a Multispecialty hospital providing health care services and also maintains pharmacy, clinical laboratory, X Ray and Scanning facility, Ambulance Service, Dietary Services etc. They have three different procurement mechan....
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....ach other in the ordinary course of business, one of which is a principal supply; In the case at hand, the applicant undertakes services of diagnosis, treatment which comprises of providing bed/ICU/room, nursing care, diagnostics including lab investigations and treatment surgical or otherwise under the directions of the Doctors. The hospital provides medicines and consumables to the In-patients in the course of treatment on the directions of medical doctor for which the In-patient is billed together by the hospital. The hospital cannot provide health services including diagnostic, treatment surgery etc. without the help of medicines to be taken during treatment and consumables used during the stay of in-patients in the hospital. Only on using these medicines and consumables as required and prescribed by the doctors and administered during their stay the treatment will be complete. Hence, supply of medicines and consumables are naturally bundled with the supply of health services. In this case, supply of health services is the principal supply as that is the reason the in-patients get admitted to the hospital. Therefore, supply of medicines, drugs and other surgical goods to in-....
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.... practitioner or para medics are exempted vide Sl. No 74 of Notification no 12/2017-C.T.(rate) dated 28.06.2017 and SI No 74 of Notification No. II(2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017. For ease of reference, the relevant entry is given below: 74 Heading 9993 Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; (b) services provided by way of transportation of a patient in an ambulance. Other than those specified in (a) above. Nil Nil On the recommendations of the 47th GST Council Meeting, the above entry of the Notification No. 12/2017 CT(rate) dated 28.06.2017 is amended vide Notification 04/2022 CT(rate) dated 13.07.2022, effective from 18.07.2022 and the same is extracted below for ease of reference. SI.No. Chapter, Section, Heading, Group or) Service Code (Tariff) Description of Services Rate (per cent) Condition 74 Heading 9993 Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; "Provided that nothing in this entry shall apply to the services provided by a ....
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.... (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017 upto 17.07.2017; and subsequent to amendment, effective from 18.07.2022, the exemption is applicable for the health care services provided by them to in-patients only when the room [ other than ICU/CCU/ ICCU/NICU] charges do not exceed Rs.5000/- per day. If the room charges exceeds Rs. 5000/- per day then the applicable rate of tax for the health care services is 5% [2.5% CGST & 2.5 % SGST] as per entry No. 31A of the Notification 11/2017 CT(rate) dated 28.06.2017 amended vide notification 03/2022 Ct(rate) dated 13.07.2022 w.e.f 18.07.2022, subject to the conditions specified in Column(5) of the entry. 9.1. Now coming to the second question viz., Whether the supply of medicines drugs and other surgical goods used in the course of providing health care services to out-patients by pharmacy unit of M/s Kumaran Medical Center for diagnosis or treatment would be considered as "Composite Supply" of heath care services under GST and consequently they are eligible to avail exemption under Notification 12/2017 CT(rate) read with Section 8(a) of GST, the Applicant has submitted that while providing health care related services....
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....tc to out-patients by the Out-patient pharmacy are not exempted. 10. The third question raised by the applicant is whether the supply of implants, prosthetics and mobility aids during course of diagnosis and treatment of disease would fall under the ambit of composite supply of healthcare service. The applicant has submitted that in the course of diagnosis and treatment the surgical procedures are to be performed for in-patients which might include the use of implants, prosthetics and mobility aids. The applicant has also stated that till date they have not provided any transfer from general stores to out -patients and only for inpatients implants such as stents, pace makers are supplied from General Stores. The supply of implants such as stents, pacemakers etc. which are implanted in the body essentially by means of a surgical procedure to in-patients and required by the patient for effective recovery and maintenance of health is a composite supply where the principal supply is of healthcare services. However, the supply of prosthetics and mobility aids supply such as wheel chairs, crutches, walkers etc, are not essentially used by in-patients and the patients have the option t....