In re Laxmi Health Care Center & ICCU (GST AAR Maharashtra)
The application before the Authority for Advance Ruling, Maharashtra, was filed by a partnership firm operating as a nursing home under the Maharashtra Nursing Home Registration Act, 1949. The applicant sought clarity on the GST treatment of various charges recovered from in-patients, including pathological and radiological tests, bed charges, medicines, and other consumables, when billed under a single invoice during the course of medical treatment. The applicant also sought confirmation on eligibility for exemption under Entry 74 of Notification No. 12/2017-Central Tax (Rate) dated 28 June 2017.
The applicant explained that it provides healthcare services through professional doctors and maintains an in-house pharmacy for supplying medicines and allied items. Patients are categorised as in-patients and out-patients. In-patients are admitted for treatment, remain under continuous supervision of doctors and nursing staff, and are provided lodging, nursing care, medicines, consumables, diagnostic services, and other facilities until discharge. A single invoice is raised for in-patients with a detailed break-up of charges. Out-patients, in contrast, only visit for consultation and may independently choose whether to purchase prescribed medicines.
According to the applicant, services and goods supplied to in-patients during treatment constitute a single supply of healthcare services. The applicant argued that in-patients approach the nursing home for treatment and cure, not for purchasing individual goods or services, and have no choice in selecting components of treatment. Medicines and consumables are supplied strictly as part of treatment and not under a separate contract. It was contended that the entire bundle of activities forms a single healthcare service, or alternatively, a composite supply where healthcare services are the principal supply. The applicant relied on statutory definitions of “composite supply” and “principal supply” under the CGST Act, relevant GST circulars, and earlier advance rulings to support the exemption under Entry 74.
