Escorts Heart Institute And Research Centre Limited Vs Additional Commissioner (Delhi High Court)
The Delhi High Court is examining a writ petition arising from a show cause notice issued under Section 76 of the Central Goods and Services Tax Act, 2017, concerning alleged non-payment of GST on medicines, medical devices, and consumables supplied during in-patient treatment. The notice, dated 29 September 2025, alleges that the hospital collected GST on such items billed at MRP but failed to deposit the tax with the Government, resulting in a demand of ₹6.66 crore.
The petitioner contends that healthcare services are fully exempt from GST and that medicines, devices, and consumables supplied to in-patients form an integral part of such exempt health services. It is asserted that no GST is charged or collected on these items when provided as part of in-patient treatment. The petitioner clarified that GST is collected and duly paid only in cases where medicines are sold through the hospital pharmacy as standalone sales.
The revenue authorities dispute this position, arguing that GST is being collected on medicines and devices even for in-patients but not remitted, justifying the issuance of the show cause notice. The Court noted that the case raises an important question on whether medicines and consumables administered to in-patients, either as part of a package or billed item-wise, attract GST when healthcare services themselves are exempt.
