In re Radiantminds Rehab LLP (GST AAR Kerala)
Radiantminds Rehab LLP, a limited liability partnership providing therapeutic and recovery services through professionals recognized under the Rehabilitation Council of India Act, 1992, sought an advance ruling on the Goods and Services Tax (GST) applicability to their services. The core contention of the applicant was that their services should be exempt under Entry 74A of Notification No. 28/2018, arguing that the exemption is linked to the nature of the service and the qualifications of the professionals, rather than the legal structure of the entity. They asserted that an LLP functions as a regulatory framework for organized service delivery, similar to hospitals, and that denying exemption based on the entity’s structure would undermine recognized professional setups. Radiantminds Rehab LLP further contended that the restriction in Entry 74A regarding establishment by government or Section 12AA entities applies only to “rehabilitation centers” and not to “medical establishments” or “educational institutions,” thus qualifying them for exemption as a medical establishment. They also argued that consolidated billing by the LLP aligns with standard healthcare practices and should not affect eligibility.
The Advance Ruling Authority examined the application and the submissions, including the certificate from Kottayam Municipality and the MSME Udyam Registration Certificate. While acknowledging the applicant’s interpretation of Entry 74A regarding the “Rule of Last Antecedent” for “medical establishments” and “educational institutions,” the Authority focused on whether Radiantminds Rehab LLP qualifies as a “medical establishment.” The Authority determined that the municipal registration and MSME certificate were insufficient to establish the applicant as a “medical establishment” under the Kerala Clinical Establishments (Registration and Regulation) Act, 2018. This Act is considered the comprehensive statutory framework for recognizing clinical establishments in Kerala, requiring registration based on parameters like staffing, infrastructure, and quality of care. Since the applicant was not registered under this Act, the services provided by Radiantminds Rehab LLP were deemed ineligible for the exemption under Entry 74A. Consequently, the services are considered taxable. Radiantminds Rehab LLP is required to register under the GST Act once its aggregate turnover exceeds the prescribed threshold. The services provided by the LLP, such as therapy and counseling, are classified under Service Accounting Code (SAC) 999319, which covers “Other human health services,” and are subject to GST at a rate of 18%.
