Case Law Details
In re Spandana Pharma (GST AAR Karnataka)
In the ever-evolving landscape of Goods and Services Tax (GST) in India, businesses often seek clarity through Advance Rulings. One such notable ruling is the Spandana Pharma case, where the applicant, engaged in providing health care services, sought guidance on various aspects of GST applicability. This article delves into the findings and discussions from the case, offering a comprehensive analysis of each question raised.
Background: The ruling begins by emphasizing the alignment between the Central Goods and Services Tax (CGST) Act, 2017, and the Karnataka Goods and Services Tax (KGST) Act, 2017, highlighting their similarity in most provisions. The article focuses on the applicant, a hospital named Spandana Pharma, providing health care services for patients with various disorders.
Question 1: Composite Supply of Medicines, Drugs, and Consumables
The first question addressed in the ruling pertains to whether the supply of medicines, drugs, and consumables used in providing health care services to in-patients qualifies as a “Composite Supply” exempt under the category of “health care services.” The ruling refers to relevant sections of Notification No. 12/2017-Central Tax (Rate) and establishes that the applicant, being a hospital, falls under the definition of a ‘clinical establishment’ offering ‘health care services.’ It concludes that the supply of medicines and consumables is naturally bundled with health care services and, therefore, constitutes a composite supply eligible for exemption.
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