In Re: M/s. KIMS Health Care Management Ltd.
GST
2018 (11) TMI 281 – AUTHORITY FOR ADVANCE RULINGS, KERALA – 2018 (18) G. S. T. L. 831 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, KERALA – AAR
Dated:- 20-10-2018
AAR No. KER/17/2018
GST
SHRI. B.G. KRISHNAN IRS AND SHRI B.S. THYAGARAJABABU B.Sc., LLM, MEMBER
Authorized Representative: Mr. K. Sivaranjan, Mr. Srihari, Mr. Shubham Mishra of Price Waterhouse & Co. LLP.
The applicant is a multi-specialty tertiary care hospital providing health care services. They have categorized the patients as Out-Patients and In-Patients for the administrative convenience. The out-patients are those Who visit the hospital for routine check-ups or clinical visits. The in-patients are those who are admitted in to the hospital for the required treatment. The in-patients are provided with stay facilities, medicines, consumables, implants, dietary food and other surgeries/ procedures required for the treatment.
There is a Central Pha
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lants, not only the health care service but also the life will also be at stake. Being a composite supply the principal supply is predominant and the room rent and dietary food provided to in-patients are ancillary supply. The applicant sought for an advance ruling on the following:
Whether the medicines, consumables and implants used in the course of providing health care services to in-patients for diagnosis or treatment would be considered as “Composite Supply” and eligible for exemption under the category 'health care services'?.
The authorized representative of the applicant was heard. It is stated that, the medicines, consumables and implants used in the course of providing diagnosis or treatment to the in-patients would be part of composite supply of health care services vide classification 9993. The medicines and surgical items supplied to the patients under medical prescription of doctors is incidental to the health services rendered in the hospital entitled to exemption be
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mitted to a hospital when they are extremely ill or have severe physical trauma. As far as an inpatient is concerned, hospital is expected to provide lodging, care, medicine and food as part of treatment under supervision till discharge from the hospital. The nature of the various services in a bundle of services will help in determining whether the services are bundled in the ordinary course of business. If the nature of services is such that one of the services is the main service and other services combined with such service are In the nature of incidental or ancillary services which help in better utility of main service then the various elements of the service are said to be naturally bundled in the ordinary course of business. Hence the medicines, implants, room provided on rent, dietary food advised by nutritionists etc used in the course of providing health care services to the patients admitted for diagnosis or treatment in the hospital or clinical establishment is undoubtedly
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reas an outpatient is concerned, hospital gives only prescription, which is an advisory in nature. The patient has absolute freedom to follow the prescription or not. Similarly there is freedom to procure the medicines or allied items prescribed, either from the pharmacy run by the hospital or from any other medicine dispensing outlets. Hospital reserves no control over his continuous treatment. As far as an outpatient is concerned there is no difference for procuring medicine either from the dispensing outlet within the hospital or from outside the hospital. In both places medicines dispensed based on prescription. Hence there is no privilege for the hospitals that are dispensing medicine to outpatients. Therefore pharmacy run by hospital dispensing medicine to outpatient or bye standers or others can be treated as individual supply of medicine and not covered under the ambit of health care services. Hence such supply of medicine and allied goods are taxable.
Government of India vice
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