In re Innovations Medi research Private Limited (AAR Rajasthan)
AAR Rajasthan addresses two key questions regarding the composite supply of medicines and procedures for inpatients in hospitals. Firstly, it determines whether such supply qualifies as a composite supply. The ruling confirms that it does, considering the nature of various services bundled in the ordinary course of business.
Secondly, the ruling examines whether the principal supply, i.e., healthcare services falling under SAC 999311, is exempted under SI. No. 74 of notification no. 12/2017 CGST Rate dated 28-06-2017. Referring to relevant circulars and previous AAR rulings, the AAR Rajasthan concludes that the supply of medicines and allied items to inpatients through the hospital pharmacy is part of the composite supply of healthcare treatment and thus not separately taxable.
AAR Rajasthan rules that the supply of medicines and other procedures during treatment for inpatients in hospitals is a composite supply. Furthermore, it states that the supply of medicines and procedures to inpatients, where the principal supply is healthcare services falling under SAC 999311, is exempted as per entry at SI. No. 74 of notification no. 12/2017 CGST Rate dated 28-06-2017.
FULL TEXT OF THE ORDER OF AUTHORITY FOR ADVANCE RULING,RAJASTHAN
Note: Under Section 100 of the CGST/RGST Act, 2017, an appeal against this ruling lies before the Appellate Authority for Advance Ruling constituted under section 99 of CGST/RGST Act, 2017, within a period of 30 days from the date of service of this order.
At the outset, we would like to make it clear that the provisions of both the CGST Act and the RGST Act are the same except for certain provisions. Therefore, unless a mention is specifically made to such dissimilar provisions, a reference to the CGST Act would also mean a reference to the same provision under the RGST Act. Further to the earlier, henceforth for the purposes of this Advance Ruling, a reference to such a similar provision under the CGST Act / RGST Act would be mentioned as being under the “GST Act”.
The issue raised by M/s Innovations Medi research Private Limited, B-I Ashadeep Endave-A, Near Akshyapatra Jaipur, 302025, Rajasthan (hereinafter referred to as “applicant”) GSTIN 08AADCI2651K1ZH. Applicant is registered as registered under Companies Atf, 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-l, 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 OF THE APPLICANT:(in brief)
1. M/s Innovations Modi research Private Limited (hereinafter referred to as applicant”) registered under Companies Act, 2013 located in the state of Rajasthan.
2. The applicant is established with the objects to establish, maintain and provide research & development facilities in medical science, client’s clinical trial processes, experienced physicians and coordinators across India, clinical trial, management expertise, medical consultancy, medical awareness programme on site or off site services, provide clinical research in all field of medical and work in the field of medical as consultants, associates, researcher and so on and to acquire, establish and maintain one or more hospital/hospitals for the reception and treatment of persons suffering from illness or mental defect or for reception and treatment of persons during convalescence or of persons requiring medicinal attention or rehabilitation, solely for philanthropic purposes and not for purposes of profit and to provide medical relief to the public in all branches of medical sciences by all available means and to set up hospitals, nursing homes and healthcare centres and provide, encourage, initiate or promote facilities for the discovery, ‘Improvement or development of new methods of diagnosis, understanding and prevention and treatment of diseases.
3. That, a unit of the applicant is providing treatment to the patients suffering from Cancer under the name of Asian Cancer Hospital located a B-l, Ashadeep Endave-A, opposite Ashadeep Green Avenue, Nilay Kunj Road, Jagatpura, Jaipur in the state of Rajasthan.
4. That currently the applicant is involved in providing Inpatient and Outpatient Facility. A patient is treated as inpatient where he is admitted to the hospital, whereas a patient is treated as outpatient where the patient is not admitted.
5. That the process of treatment of patients as Inpatient by the applicant is carried out in as following:
i. Patient visits as outpatient for consultancy or under emergency
