2018 (9) TMI 1340 – APPELLATE AUTHORITY FOR ADVANCE RULING, KARNATAKA – 2018 (17) G. S. T. L. 365 (App. A. A. R. – GST) – Levy of GST – Rent payable by a Hospital – whether GST is leviable on the rent payable by a hospital supplying lifesaving services (cardiology and emergency services)? – input tax credit – challenge to AAR Decision.
–
Held that:- The healthcare services which the appellant provides as his outward supply, is exempted from GST by virtue of entry Sl. No 74 of Notification No 12/2017 CT (R) dated 28.06.2017 as amended.
–
No GST is payable on outward healthcare supplies, as these are exempted supplies – “Renting in relation to immovable property” has been defined under the definition clause 2(zz) of the CGST Notification No 12/2017- Central Tax (Rate) dated 28-06-2017 and KGST Notification (12/2017) No FD 48 CSL 2017 Bengaluru dated 29-06-2017. By virtue of these Notifications, services by way of renting of residential building for use of residence only is exemp
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
AAAR/Appeal-01/2018 Dated:- 5-9-2018 – SRI A.K. JYOTISHI, AND SRI SRIKAR M.S., MEMBER PROCEEDINGS (Under Section 101 of the Central Goods and Service Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017) At the outset, we would like to make it clear that the provisions of both the CGST Act and the KGST Act are in pari materia and have the same provisions in like matters, and differ from each other only on a few specific provisions; therefore, unless a mention is particularly made to such a dissimilar provision, a reference to the CGST Act would also mean a reference to the corresponding similar provisions under the KGST Act. The present appeal has been filed under section 100 of the Central Goods and Service Tax Act, 2017 and the Karnataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST Act ) by M/S. TATHAGAT HEART CARE CENTRE LLP, (herein after referred to as the Appellant ) against the Advance Ruling Nov No. KSA ADRG 4/2018 dated 21st M
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
FOR ADVANCE RULING – KARNATAKA that GST is leviable on the rent paid / payable for premises taken on lease by the Applicant. 4. Aggrieved by the said ruling of the Authority (hereinafter referred to as impugned order ), the applicant has filed an appeal under section 100 of the CGST Act, 2017 / KGST Act, 2017 on the following grounds: i. The Advance Ruling Authority has erred in holding that GST is leviable on the rent paid / payable on premises, taken on lease by the Applicant, under the facts of the case and has not considered grounds of appeal / statement of Applicant s interpretation of law or facts, as the case may be in right earnest thus violating the principals of natural justice. ii. The Appellant is not required to pay GST on room rent collected from the patients and also on supply of medical services to the ailing patients undergoing critical heart care treat mentor lifesaving services. iii. The Appellant does not have taxable value of supply of medical services by virtue of
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ule 89(h) of KGST Act which says that invoice received and issued during the tax period in a case where the claim pertains to refund of any unutilized input tax credit under sub-section (3) of section 54 where the credit has accumulated on account of output supplies other than nil rated or fully exempted supplies. 6. He pleaded that the Hon ble Appellate Authority for Advance Ruling should pass a ruling on the applicability of Rule 89 so that they can pursue the refund of input tax credit paid on rent taken on premises in the interest of natural justice. DISCUSSION AND FINDINGS 7. The Appellant is running a Cardiology Specialized Hospital which provides healthcare services. The said hospital is run on the premises taken on lease basis by the Appellant for which GST is paid by him on the rental amount. 8. The Appellant had sought for a ruling before the Advance Ruling Authority on the question whether GST is leviable on the rent payable on the leased premises. On this question the AAR v
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
refund of input tax credit paid on the rent taken on the premises. 9. In terms of CGST Notification No 11/2017 – Central Tax (Rate) dated 28-06-2017 and KGST Notification (11/2017) No FD 48 CSL 2017 Bengaluru dated 29-06-2017, CST is leviable @ (CGST @ 9% + SGST @ 9%) on the rent paid / payable for premises taken on lease by the Appellant for running the hospital vide Sl.No.16 (Real Estate Services) of the said Notifications. The appellant has stated that the AAR has erred on this point. The plea made by the Appellant before us is that the input tax credit of the GST paid on the rent cannot be availed as credit by them since their output supply is not taxable and hence they should be allowed to get a refund of the ITC to the extent of the GST paid/payable on the rent. They have also sought a decision from us on the applicability of Rule 89 of the KGST Rules. 10. The healthcare services which the appellant provides as his outward supply, is exempted from GST by virtue of entry Sl. No 74
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
al Tax (Rate) date 28-06-2017 and KGST Notification (11/2017) No FD 48 CSL 2017 Bengaluru dated 29-06-2017. GST is leviable @ 18% (CGST @ 9% + SGST @ 9%) on the rent paid / payable for premises taken on lease by the Applicant for running the hospital vide Sl.No.16 (Real Estate Services) of the said Notifications. 12. As regards the plea that this Authority is required to pass a ruling on para 8(b) and observe that these issues are outside the realm of our consideration. The scope of the Appellate Authority for Advance Ruling under section 101 of the Act is limited to passing such order, as it thinks fit, confirming or modifying the ruling appealed against or referred to. There was no question raised before the AAR seeking a ruling on the aspect of ITC used in providing exempted supplies and refund of Input Tax credit. This issue has been raised for the first time before us in appeal. We are of the view that, there can be no appeal on issues on which no ruling was sought before the Auth
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =