Page 123 - GSTL_23rd April 2020_Vol 35_Part 4

2020 ] IN RE : OPTM HEALTH CARE PVT. LTD. 449
4. Observations & Findings of the Authority :
4.1 Entry No. 74(a) of the Exemption Notification exempts inter alia
health care services by a clinical establishment from payment of GST. Para No.
2(zg) of the said notification defines health care services. It means any service by
way of diagnosis or treatment or care for illness, injury, deformity, abnormality
or pregnancy in any recognised system of medicines in India and includes ser-
vices by way of transportation of the patient to and from a clinical establishment,
but does not include hair transplant or cosmetic or plastic surgery, except when
undertaken to restore or to reconstruct anatomy or functions of the body affected
due to congenital defects, developmental abnormalities, injury or trauma. ‘Clini-
cal establishment’, within the meaning under Para No. 2(s) of the Exemption No-
tification, is a hospital, nursing home, clinic, sanatorium or any other institution
by, whatever name called, that offers services or facilities requiring diagnosis or
treatment or care for illness, injury, deformity, abnormality or pregnancy in any
recognised system of medicines in India, or a place established as an independ-
ent entity or a part of an establishment to carry out diagnostic or investigative
services of diseases.
4.2 It, therefore, needs to be examined whether the Applicant is a ‘clini-
cal establishment’ that provides health care services by way of diagnosis, treat-
ment or care for illness in any recognised system of medicines in India.
4.3 The term ‘recognised system of medicine’ is not defined in the GST
Act or notifications issued thereunder. It is defined under Section 2(o) of the CE
Act. It means Allopathy, Yoga, Naturopathy, Ayurveda, Homoeopathy, Siddha
and Unani Systems of medicines or any other system of medicine recognised by
the State Government.
4.4 The Applicant claims that it administers certain plant-based medi-
cations for the treatment of osteoarthritis and disorders of similar nature. The
medicaments are not supplied standalone, but ancillary to the supply of health
care service. It is a composite supply of health care service called ‘phytotherapy’.
Applicant further submits that ‘phytotherapy’ is a treatment based on the ayur-
vedic system of medicine.
4.5 Bundled supplies of two or more taxable goods or services, one of
which is identifiable as principal supply within the meaning of Section 2(90) of
the GST Act, is defined as ‘composite supply’ under Section 2(30) of the said Act
if they are naturally bundled and supplied in conjunction with one another in the
ordinary course of business. All other bundled supplies are clubbed under the
term ‘mixed supply.’
4.6 It appears from the submissions of the Applicant that its ‘phyto-
therapy’ combines application of plant-based preparations with services having
some therapeutic value. If the preparations applied are manufactured exclusively
in accordance with the formulae described in any authoritative book of Ayurve-
da specified in the First Schedule of the Drugs and Cosmetics Act, 1940, for use
in the diagnose, treatment, mitigation or prevention of specific disease or disor-
der, they can be called ayurvedic medicine [refer to Section 3(9) of Drugs and
Cosmetics Act, 1940] and the treatment provided may be considered a recog-
nised system of medicine in India.
4.7 The Applicant’s submissions, however, do not clarify or claim that
its plant-based preparations are manufactured exclusively in accordance with the

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