In re ARPK Healthcare Private Limited (GST AAR Haryana)
1. A patient comes to the M/s Asian Hospital for treatment of some gastroenterological disease. The patient pays a sum of Rs. X for his OPD/IPD to the counter of the Asian Hospital. Here the M/s Asian Hospital is a clinical Establishment and it is providing the patient the requisite medical treatment. The hospital has charged the payments/ fees from the patient, and so the hospital becomes liable to deliver the services. The Asian Hospital has all the facilities for treatment of the ailments but not having the specialized doctors (neither as an employee nor the hired one). The doctors in this regard are supplied by the applicant company. Here, the applicant company is paid by the hospital to acquire its services and not by the patients. The consideration amount will be paid as per the terms and condition of the contract. The Company being incorporated under the Companies Act, 2013 may or may not be a clinical establishment, This company would act as a clinical establishment only if it is involved in treating the patients as defined under the definition (of the healthcare services) of the notification issued under the Act ibid but it becomes a supplier of specialized man power if it act differentially as it’s in the present case.
2. M/s Asian Hospital outsourced its requirements of specialized doctors particularly for the gastroenterological services from the applicant company and not treating the patient by itself as a clinical establishment. The exemption claimed by the applicant is available as per the entry of the said notification only when the clinical establishment itself provides this service (treatment related to gastroenterological problems) as a part of health care services to the in-patients as well as out-patients and the same is not available when such supply of services provided by a third party as a contractual arrangement.
In this regard, we need to see what is the legislative intention behind any exemption of tax given under the GST Act i.e. the purpose for not taxing the healthcare services is to give benefit to the common man/patients as it (Healthcare services) is one of the basic necessities of life. Similarly in the field of education i.e. School/College/University tuition fees is exempted whereas the tuition fees charged by the coaching central institutions is taxable.
And it is also observed that a company/corporation cannot be a doctor for providing the health care services which are exempted under the Notification No. 12/2017 -CENTRAL TAX (RATE) Dt. 28/06/2017 From an overall view of the matter/issue at hand it can be said that M/s Asian Hospital is/will be outsourcing (the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by company’s own employees and staff) the services of M/s ARPK (the applicant) and applicable tax under the GST Act shall be levied accordingly.
1.Whether Fee/ charges received by M/s ARPK from M/s Asian is exempt under GST?
2. Whether Fee/charges for Health Care Services received by M/s Asian is exempt under GST.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,HARYANA
APPLICANT’S ELIGIBILITY FOR SEEKING AN ADVANCE RULING:
To file an application before the Authority of Advance Ruling, the applicant must satisfy the conditions prescribed under the Central Goods and Services fax Act, 2017 (hereinafter referred to as CGST Act, 2017) and Haryana Goods and Services fax Act, 2017 (hereinafter referred to as HGST Act, 2017). Since the provisions of both the Acts are parimateria, any reference to provisions of CGST Act, 2017 in this order should be construed as a reference to corresponding provisions of the HGST Act, 2017 as well as IGST Act, 2017. Section 97(2) of the CGST Act, 2017 prescribes that an Advance Ruling may be sought inter alia on the questions of (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 (f) whether applicant is required to be registered (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.
Proviso with reference to the Section 98(2) of CGST Act, 2017 slates that where the questions raised in the application is already pending or decided in any proceedings in the case of the applicant under any provision of this Act, the application may be rejected by the Advance Ruling Authority after providing an opportunity of being heard to the applicant. In the present case, the applicant has undertaken in form ARA-01 that the issue is neither pending nor decided in any proceedings under any of the provisions of the Act. The applicant has generated CPIN with reference to the applicable fee of Rs. 10,000/- under both the Acts. As the applicant is not registered under the HGST Act, 2017 so he could not raise DRC-03. The matter is being examined on merits by the authority.
Statement of facts as per ARA-01:-
M/s ARPK Healthcare Private Limited is providing Health Care Services as defined in clause (zg) of the Notification No. 12/2017 -CENTRAL TAX (RATE) Dt. 28/06/2017 Similarly, M/s Asian Institute of Medical Science (a unit of Blue Sapphire Healthcare Private Limited) is providing Healthcare Services as defined in clause (zg) of Notification No. 12/2017 -CENTRAL TAX (RATE) Dt. 28/06/2017 M/s ARPK has approached to M/s Asian Institute of Medical Science, Faridabad that authorised medical practitioner employed in M/s ARPK Healthcare Provide Ltd. will provide Gastroenterologist services (Healthcare Services) to the patients of M/s Asian. Fee/Charges of Gastroenterologist services will be paid by patient to M/s Asian Hospital. Thereafter M/s Asian will pay to M/s ARPK for the services rendered by them to the patients of M/s Asian Hospital. Both M/s Asian hospital and M/s ARPK healthcare will share the charges paid by the patients. In our opinion in both the cases fee/charges for Healthcare Services shall not be liable to GST because fee/Charges received by M/s Asian as well as M/s ARPK are exempt from levy of GST. Basis of our reasoning are as follows: –
As per entry number 74 of Notification No. 12/2017 -CENTRAL TAX (RATE) Dt. 28/06/2017 (as amended time to time) supply of following services is exempt from levy of GST. Extract of relevant entry is as follows:-
