In re M/s. Baby Memorial Hospital Ltd. (GST AAR Kerala)
1. Whether the applicant, a Multi Speciality Hospital is liable to pay GST on supply of medicines, drugs and other surgical goods from its pharmacy to inpatients?
The supply of medicines, drugs and other surgical goods from its pharmacy to in-patients are in the course of providing health care services which are naturally bundled and are provided in conjunction with each other, would be considered as ‘”Composite Supply” and eligible for exemption under the category “health care services’.
2. Whether the applicant, a Multi Speciality Hospital is liable to pay GST an supply of medicines, drugs and other surgical goods from its pharmacy to outpatients?
The supply of medicines, drugs and other surgical goods by the hospital from its pharmacy to out-patients as part of health care services is a taxable supply of goods and thereby GST is applicable.
3. Whether the applicant is liable to pay GST on supply of incidental services as X ray, Clinical laboratory, etc rendered as part of health care service?
As per SRO.No.371/2017 vide sl.no.74 (Notification No. 12/2017-CT (Rate) dtd,28-06-2017), services by way of diagnosis come under the category of health care services covered under SAC 9993 and thereby exempted.
4. Whether the applicant is liable to pay GST on supply of implants and artificial limbs made during course of treatment to patients?
The supply of artificial body parts / devices such as heart valve, artificial kidney, artificial joints, and coronary stents etc which are implanted in the body essentially by means of a surgical procedure can be classified as a composite supply where the principal supply is of healthcare services. In case of artificial body parts / devices which are worn / attached / fitted / fastened to the body for which a surgical procedure may or may not be required; the nature / taxability of supply has to be determined on a case to case basis considering the facts and circumstances of each case.
The supply of goods like wheel chairs, tricycles etc to the patients cannot be considered as a composite supply where the principal supply is health care services and accordingly will be liable to GST as individual supply of goods.
FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, KERALA
M/s. Baby Memorial Hospital Ltd, is a multi speciality hospital engaged in providing health care service to patients, supply of medicines and other allied services. In order to provide health care services, the applicant is maintaining facilities; like full fledged hospital with all infra structure, Pharmacy, Clinical Laboratory, X Ray & Scanning facility, Ambulance services, dietary services etc. As a provider of health care service, the applicant undertakes inpatient and outpatient treatments. In this sector there is a conflict that, whether all services provided by a hospital are to be bundled as a composite service or each service and supply of goods is to be treated as individual transactions. Hence the applicant requested advance ruling on the following:
