Administering of COVID-19 vaccine by hospitals is a composite supply & liable for GST at 5%

In re Krishna Institute of Medical Sciences Limited (GST AAAR Andhra Pradesh)

Administering of COVID-19 vaccine by hospitals is a composite supply and liable for GST at 5%

The AAAR, Andhra Pradesh in the matter of M/s Krishna Institute of Medical Sciences Limited [Order No. AAAR/AP/07(GST)/2022 dated December 19, 2022] upheld the order of the AAR wherein it was held that the administration of COVID – 19 vaccine is not an exempted supply as it is not covered under the definition of ‘healthcare services’. Further held that, it is a composite supply wherein the principal supply is the ‘sale of vaccine’ and the ancillary supply is the service of ‘administering of vaccine’ and liable to Goods and Services Tax (“GST”) at 5%.

Facts:

M/s. Krishna Institute of Medical Sciences Limited (“the Appellant”) is a public limited company and a multi-specialty hospital providing healthcare services and claiming exemption on the said service under the Advance Ruling No. AAR No.04/AP/GST/2022 dated 21.03.2022 (“Services Exemption Notification”). The Appellant also makes pharmacy supplies to outpatients, which is taxable and it accordingly remits taxes on the same.

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