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2023 (6) TMI 488
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....the "GST Act". The issue raised by M/s Innovations Medi research Private Limited, B-l Ashadeep Enclave-A, Near Akshyapatra Jaipur, 302025, Rajasthan (hereinafter referred to as "applicant") GSTIN 08AADCI2651K1ZH. Applicant is registered as registered under Companies Act, 2013 located in the state of Rajasthan. A unit of the applicant is providing treatment to the patients suffering from Cancer under the name of Asian Cancer Hospital located a B-1, Ashadeep Enclave-A, opposite Ashadeep Green Avenue, Nilay Kunj Road, Jagatpura, Jaipur in the state of Rajasthan. The question raised by applicant in respect of a patient who is admitted in the hospital and is treated as inpatient is fit to pronounce advance ruling as it falls under the ambit of the Section 97(2) (b), (e) & (g) given as under: (b) applicability of a notification issued under the provisions of this Act; (e) determination of the liability to pay tax on any goods or services or both; (g) whether any particular thing done by the applicant with respect to any goods or services or both amounts to or results in a supply of goods or services or both, within the meaning of that term; A SUBMISSION O....
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....nt converts into an Inpatient. ii. Treatment as Inpatient * The patients undergo an admission process and shifted to a ward/room, where they are provided nursing care and treatment. * The patients are given required medicines as prescribed by the doctors during his treatment. A Vital Chart of the in-patient is also maintained where details like BP, pulse, SPO2, temperature, RR are captured. The patient is visited by the doctor who assesses and review the medicines being given to the patient. A follow up sheet is maintained for all inpatients wherein details of their clinical finding and treatment advised is maintained. A specimen patient's Vital Chart and Follow up Chart has been annexed as specimen and marked as Annexure 3. * The patients also undergo procedures such as chemotherapy during their treatment. iii. Discharge and Billing * The patients are discharged after the treatment is over. A Discharge Summary is generated at the time of discharge of the patient's containing details like diagnosis, clinical history, vitals, treatment given, medication advised, etc. * Further, the patient are billed for the full....
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....ll be deemed to take place from one such person to another;] (b) import of services for a consideration whether or not in the course or furtherance of business; (c) the activities specified in Schedule I, made or agreed to be made without a consideration [(1A) Where certain activities or transactions constitute a supply in accordance with the provisions of sub-section (1), they shall be treated either as supply of goods or supply of services as referred to in Schedule II.] 5. That as per Section 2(30) composite supply is defined as (30) "composite supply" means a supply made by a taxable person to a recipient consisting 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; (90) "principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary; 6. That as per Section 8 - Tax liability on composite and mixed supplies. Th....
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....ally four elements i.e. a) A Supply (Generic) b) Of Goods or Services c) For Consideration d) In course of or furtherance of business 11. That in the absence of any of these elements, the transaction falls beyond the scope of supply as given under the GST Act(s) and hence in such a case, the levy of tax would not be attracted. In the given scenario, on perusal of fact, it is evident that all the four elements as specified above are available to qualify the treatment of cancer Patients by the applicant as a supply. 12 That, in continuation of above, the subsequent issue for determination is whether this transaction is an individual supply of service or goods or both or whether it's a composite supply. A Composite Supply, from its definition under the Act(s) has following elements: a) a supply made by a taxable person to a recipient b) consisting of two or more taxable supplies of goods or services or both, or any combination thereof, c) which are naturally bundled and supplied in conjunction with each other d) in the ordinary course of business e) And one of which is a principal supply. 13. Tha....
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....or inseparable. In given case as all activities as mentioned above are essential, hence it can be said that they are "integral" to the process of treating inpatients and hence is one single unified supply. 20. That thus there is no supply of goods in the given transaction but rather same is an integral part of the supply of treatment of inpatients by the applicant. The similar view has been held in case of Card Protection Plan Ltd v. Commissioners of Customs and Excise [2012] 22 taxmann.com 176 (ECJ). Two or more acts to be regarded as a single supply if they are so closely linked that they form a single indivisible economic supply: Where a transaction comprises a bundle of features and acts, then, whether it constitutes one single supply, or, two or more supplies should be determined taking into account the facts and circumstances of the case. There may be a single supply where some element(s) constitute the 'principal' supply, while others are 'ancillary'. Further, if two or more elements or acts supplied by the taxable person to the customer are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be art....
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.... petitioners provide all types of medical services, that include surgical procedures which require administering drugs and may involve installing stents, implants etc. as an essential part of such procedures, like open heart surgery, angiography, knee surgery, hip replacement etc. "A medical procedure commences with a patient visiting a hospital to elicit a doctor's opinion regarding his medical condition and in case he requires a medical procedure, information regarding the particulars of the procedure and the cost. The patient is, thereafter, informed of the particulars of the medical procedure, the drugs, implants, stents etc. that are required for his treatment/medical procedure and the cost. The patient accepts the offer and opts for a particular procedure. Once having opted for a particular procedure, the choice of the drugs, implants, stents etc. would depend upon medical advice and only where, medically permissible, the choice of the patient. The question posed before us would, therefore, have to be further refined, namely, whether a medical procedure can be severed into separate elements of service and sale with service being the medical advice and medical pro....
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....tted in hospital, integral part of healthcare service extended to patient - Hence, supplies made in course of providing treatment to patients admitted in hospital undoubtedly naturally bundled in ordinary course of business Principal supply i.e. healthcare service is predominant element of composite supply and other supplies such as room, medicines, implants, consumables and incidental or ancillary to predominant supply - These goods supplied to inpatients, component of composite supply, where principal supply i.e. healthcare services falling under SAC 9993 11, exempted as per entry at SI. No. 74 of Notification No. 12/2017-C.T. (Rate) - Section 2(30) of Central Goods and Services Tax Act, 2017. -The patients admitted to a hospital for treatment expect that proper diagnosis of the disease is made and treatment including appropriate medicines, surgical procedures if necessary, consumables and implants required along with proper diet is administered to them in the most efficient manner so that they can regain their health within the shortest possible time and resume their activities, [paras 8.7, 8.8, 8.9] 26 That in case of KIMS Health Care Management Ltd reported in 2018 (18) GST....
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....d from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma. 30. The term "clinical establishment" is defined in Para 2(s) of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017 as follows; "clinical establishment" means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or 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. 31. That, there is no ambiguity in the fact that the whole process of examination of cancer patients is a treatment which is based on allopathic science of medicine. 32. That whether allopathy is recognized system of medicine in India or not was answered in erstwhile Education Guide issued by CBEC on 1-7-2012 when negative list was i....
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....on as given in para (zg) of notification no. 12 CGST Rate dated 28-06-2017. 35. That, the second condition that is required to be satisfied to fall under entry no. 74 of the said notification is that the Health Care services shall be provided by a clinical establishment as defined in para 2(s) of the Notification No. 12/2017-Central Tax (Rate), dated 28-6-2017. 36. That Clinical establishment as defined in the said notification shall mean a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or 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; 37. That there is no ambiguity in the fact that the applicant is a Clinical Establishment since it is registered under section 15 of Clinical Establishment (Registration and Regulation) Act, 2010 for providing medical Services as a Single Specialty under Allopathy System Of medicine. 38. That, the applicant is providing servi....
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....ndependently from the examination of patient making it a composite supply. F. FINDINGS, ANALYSIS & CONCLUSION: At the outset we would like to make it clear that the provisions of CGST Act and RGST Act 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 RGST Act. 1) We have carefully examined the statement of facts, supporting documents filed by the Applicant along with application, oral and written submissions made at the time of hearing. We have also considered the issues involved, on which advance ruling is sought by the applicant, and relevant facts. We would like to discuss the submission made by applicant and will take up the above question for discussion one by one. 2) The applicant M/s Innovations Medi-research Private Limited (hereinafter referred to as "applicant") registered under Companies Act, 2013 located in the state of Rajasthan. Applicant have one unit M/s Asian Cancer Hospital located a B-1, Ashadeep En....
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....t SI. No. 74 of Notification No. 12/2017 - Central Tax dated 28-6-2017. 6.2) So, we observe that there is no dispute that treatment of cancer Patients by the applicant is supply Sec. 7(1) of CGST Act, 2017 and falls under the ambit of GST health care services falling under SAC 999311. 6.3) The applicant supply of medicines and other procedures to inpatients admitted to hospital during treatment. Thus, applicant is involved in supply of service as well supply of goods i.e medicine along with taxable as well as exempt supply. 7) Now we would like to examine next, whether the supply made by applicant is exempt under entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017 and whether this is composite supply or not. 7.1) The relevant portion of Notification no. 12/2017-CGST Rate dated 28-06-2017 as amended is as under-: 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; (b) services provided by way of transportation of a patient i....
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....d by advance appellate authorities. However, we observe that the judicial pronouncements of various judicial authority referred by applicant apart from AAR rulings are pre-GST era and applicant use portion of said pronouncements as per his suit will and none of pronouncement submitted by applicant in his favours squarely covers the present question of law in respect of applicability of GST. 7.5) We find that C.B.I & C has clarified vide Circular No. 27/01/2018-GST, dated 4-1-2018 that room rent in hospital is exempted. Further clarifications vide circular No. 32/06/2018-GST, (F.No. 354/17/2018 TRU Dt. 12.02.2018) issued based on the approval of 25th GST Council Meeting held on 18.01.2018, it was clarified that Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. 7.6) In light of definitions as discussed above and clarification circulars on room rent and food supply by hospital to in-patients, we held that same principle should be applicable in case of dispensing of medicine to in....