Page 119 - GSTL_20th August 2020_Vol 39_Part 3

2020 ] IN RE : CMC VELLORE ASSOCIATION 333
medical practitioner or para medics are exempted vide Sl. No. 74 of Notification
No. 12/2017-C.T. (Rate), dated 28-6-2017. (Section 11 of the CGST Act grants the
power to the Government of India to exempt goods or services or both of any
specified description from the whole or part of the tax leviable thereon through
the issuance of notification.
Based on the approval of 25th GST Council Meeting held on 18-1-2018 (F.
No. 354/17/2018-TRU, dated 12-2-2018), it was clarified that food supplied to the
in-patients as advised by the doctor/nutritionist is a part of composite supply of
health care and not separately taxable. Other supplies of food by hospital to pa-
tients not admitted are taxable. The same principle is applicable in the case of
dispensing of medicines also.
The applicant referred to an order of Authority of Advance Ruling, Kera-
la No. Ker/16/2018, dated 19-9-2018 [2018 (18) G.S.T.L. 142 (A.A.R. - GST)],
which reads as under :
(i) The supply of medicines and allied items provided by the hospital
through the pharmacy to the in-patients is part of composite supply
of health care treatment and hence not separately taxable.
(ii) The supply of medicines and allied items provided by the hospital
through the pharmacy to the out-patients is taxable.
In GST scenario health care services by a clinical establishment, an authorized
medical practitioner or para medics have been exempted vide classification 9993.
6. Record of Personal Hearing :
The authorized representatives of the applicant, CA Theresa D, FCA and
CA P. Venkataraju, FCA appeared for Personal Hearing on 23-10-2019 and they
reiterated the submission already made in the application.
7. Discussion and Findings :
We have examined the issues raised in the application. The taxability,
classification of the services, applicable rate of tax, eligibility of exemption etc.,
for the goods and services supplied or to be supplied, as governed under the
provisions of respective GST Acts are examined.
The applicant as stated in the application renders health care services to
in-patients in the form of supply of medicines, drugs, stents, implants etc. being
administered during the medical treatment or procedure. Now we examine the
issue at hand i.e., whether the above-mentioned supplies to in-patients through
pharmacy is liable to tax or not. Primarily the health care services provided by
the applicant are exempt under Sl. No. 74 Heading 9993 vide Notification No.
12/2017-Central Tax (Rate), dated 28-6-2017.
The health care services as explained in (zg) of para 2 of Notification No.
12/2017-Central Tax (Rate), dated 28-6-2017, defines service by way of diagnosis,
or treatment or care for illness, injury, deformity, abnormality or pregnancy in
any recognised system of medicines in India. In common parlance, when one
looks into the definition, ‘the treatment or care’ extended by hospital can be
thought of devoid of medicines, relevant consumable, or implants, by no stretch
of imagination. The supply of medicines and the consumables are integral part of
the treatment extended to the in-patients by the hospital. Hence, we are of the
opinion that the services rendered by the applicant is a composite supply as de-
fined under Section 2(30) of CGST Act, 2017 in which the principal supply is
health care, being predominant and the supply of medicines, drugs, implants,
GST LAW TIMES  20th August 2020  119