TaxTMI 
TaxTMI 
2025 (7) TMI 194
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.... subject to quality verification by the hospital. In certain medical scenarios where alternative choices are available-such as selecting between different brands or types of implants (e.g., titanium vs. metal)-patients are permitted to make an informed choice, and billing is done accordingly. However, this option is not available for services offered under fixed, all-inclusive treatment packages. The hospital issues tax invoices for the supply of medicines and related items, both to in-patients and out-patients, in compliance with the GST law. The applicable GST, where charged, is clearly disclosed in the invoice, and the tax is duly paid to the government. 2. In this Ruling, a reference hereinafter to the provisions of the CGST Act, Rules or the Notifications issued thereunder shall include a reference to the corresponding provisions of the KSGST Act, Rules or the Notifications issued thereunder. 3. The details of the questions on which advance ruling is sought are given above and are not being reproduced. 4. The contentions of the applicant: 4.1 As per Section 9(1) of the CGST Act, 2017, GST is applicable on all intra-State supplies of goods or services, excluding alc....
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....forms part of the health care service. These scenarios are not directly addressed in current laws or rulings and require further clarification. Thus, GST applicability varies based on the nature of the treatment, whether the patient is admitted, and how the supply is structured. The applicant needs clarity in the matter. 5. Comments of the Jurisdictional Officer The application was forwarded to the jurisdictional officer as per provisions of Section 98 (1) of the CGST Act. The Jurisdictional officer reported that no proceedings related to issue raised in the advance ruling application pending in that office. Hence it is construed that no proceedings are pending on the issue against the applicant. 6. Personal Hearing: The applicant was granted an opportunity for a personal hearing on 02.04.2025. Shri. Tony C Kallukalam, Chartered Accountant represented the applicant in personal hearing. In the hearing, the contentions raised in their written submission were reiterated by the representative. 7. Discussion and Findings: 7.1 Let us first consider the taxability of medicines and medical supplies to patients. Such items fall under the category of goods and are per se....
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....Consequently, any medicines and medical supplies that are naturally bundled with such healthcare services inherit the nature of the principal supply and therefore become eligible for GST exemption. This interpretation is also supported by Circular No. 32/06/2018-GST dated 12-02-2018, wherein it was clarified that "Food supplied to the in-patients as advised by the doctor/nutritionist is a part of the composite supply of healthcare and not separately taxable. "Accordingly, the underlying principle is that healthcare services are exempt from GST. When medicines and medical products are supplied as part of a naturally bundled package with healthcare services, the entire supply is treated as a composite supply, and the exemption available to healthcare services under GST applies to the entire transaction, including the medicines and medical products. This position has been consistently upheld by various Advance Ruling Authorities, including: • Ernakulam Medical Centre (Kerala AAR, 2018) • Baby Memorial Hospital (Kerala AAR, 2019) • St. Thomas Hospital (Kerala AAR, 2021) • CMC Vellore Association (Andhra Pradesh AAR, 2020) The....
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....estion No. 2.1 pertains to supplies made to patients who are not admitted to the hospital but who receive treatment as outpatients. This includes cases such as dialysis, dressing, chemotherapy, minor surgeries, other non-admission treatments and procedures, and pre-admission services such as those provided in the casualty department. There is no ambiguity that the aforementioned services fall squarely within the scope of health care services, which are defined as "any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicine in India, and includes services by way of transportation of the patient to and from a clinical establishment ... ". In such instances, medicines and other supplies provided to patients are naturally bundled with the underlying health care services. Importantly, the law does not create a distinction between 'inpatients' and 'outpatients' for the purpose of granting exemption. Instead, the eligibility for exemption must be assessed on the basis of whether the supplies are part of a composite supply of medical services. Therefore, we are of the opinion that where a....
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.... treatment of a particular disease or surgery and charged to patient irrespective of the type and quantity of medicine, supplies etc. issued to patients. 1.2 In the case where a package is offered to patient which covers the treatment for a consolidated amount and this amount is pre-fixed by the Hospital with respect to treatment of a particular disease or surgery. But the supply of medicine and certain other supplies like implants are not included in this package and will be billed extra, according to the type, brand (when choice available to patient) and quantity of items issued to the patient. 1.3 In the case where package is not applicable and the treatment, medicines, other supplies and other items are charged to patients separately at actuals. In this case supply of medicine and other supplies are being charged separately according to the type, brand (when choice available to patient) and quantity of items issued to the patient. 1.4 In the case where the percentage of value of medicines other supplies represents major portion of the total expenditure billed to a patient. Ruling: In the case of inpatients, the supply of medicines, implants and oth....