5% GST payable on administering of COVID-19 vaccination by hospitals

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

AAR held that administering of COVID-19 vaccination by hospitals is a Composite supply, wherein the principal supply is the ‘sale of vaccine’ and the auxiliary supply is the service of ‘administering the vaccine’ and the total transaction is taxable at the rate of principal supply i.e, 5%.

Question: Whether administering of COVID-19 vaccination by hospitals is Supply of Good or Supply of Service?

Answer: It is a Composite supply, wherein the principal supply is the ‘sale of vaccine’ and the auxiliary supply is the service of ‘administering the vaccine’ and the total transaction is taxable at the rate of principal supply i.e, 5%.

Question: Whether administering of COVID-19 Vaccine by clinical establishments (Hospitals) qualify as “Health care services” as per Notification No. 12/2017 Central Tax Rate dated 28.06.2017?

Answer : Negative

Question: Whether administering of COVID-19 vaccination by clinical establishment is exempt under GST Act?

Answer: Negative

Read AAAR Order : 5% GST payable on administering of COVID-19 vaccination by hospitals

FULL TEXT OF ORDER OF AUTHORITY OF ADVANCE RULING, ANDHRA PRADESH

1. At the outset we would like to make it clear that the provisions of CGST Act, 2017 and SGST Act, 2017 are in pari materia and have the same provisions in like matter and differ from each other only on a few specific provisions. Therefore, unless a mention is particularly made to such dissimilar provisions, a reference to the CGST Act would also mean reference to the corresponding similar provisions in the APGST Act.

2. The present application has been filed u/s 97 of the Central Goods & Services Tax Act, 2017 and AP Goods & Services Tax Act, 2017 (hereinafter referred to CGST Act and APGST Act respectively) by M/s. Krishna Institute of Medical Science Limited (hereinafter referred to as applicant), registered under the AP Goods & Services Tax Act, 2017.

3. Brief Facts of the case:

The applicant, M/s Krishna Institute of Medical Sciences Limited is a public limited Company, and a multispeciality hospital, rendering healthcare services and claiming exemption on the said service vide Notification No. 12/2017 Central Tax Rate dated 28.06.2017. Apart from healthcare services, the Company also makes pharmacy supplies based on doctors prescriptions to outpatients, which is taxable and accordingly the Company remits taxes on the same. The Company has been permitted to administer COVID-19 vaccine. The process of administering COVID-19 vaccination has been narrated below:

3.1 Administration of vaccination:

Vaccine administration is critical to ensure that vaccination is safe and effective. CDC (Centres for Disease Control and Prevention) recommends that all health care personnel who administer vaccines receive comprehensive, competency-based training on vaccine administration policies and procedures before administering vaccines. Comprehensive skills-based training should be integrated into existing staff education programmes such as new staff orientation and annual education requirements.

Government has constituted National Expert Group on Vaccine Administration for COVID-19 (NEGVAC). The NEGVAC will guide all aspects of the COVID-19 vaccine introduction in India.

For any new vaccine introduction, healthcare providers will be responsible for handling and administering the vaccine as well as be a major source of information for the community.

As per NEGVAC, the vaccination team consists of vaccination officers and vaccinator officer. Vaccinator officer is the one who is responsible for vaccination of beneficiary. The following health care professionals can only be the vaccinator officers: