In Re: M\/s. Columbia Asia Hospitals Private Limited
GST
2018 (12) TMI 474 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2019 (20) G. S. T. L. 154 (A. A. R. – GST)
AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – AAR
Dated:- 13-11-2018
AAR No. KAR ADRG 26\/2018
GST
SRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER
\nRepresented by Sri Naveen Rajapurohit, Chartered Accountant
\nORDER UNDER SUB-SECTION (4) OF SECTION 98 OF CENTRAL GOODS AND SERVICE TAX ACT, 2017 AND UNDER SUB-SECTION (4) OF SECTION 98 OF KARNATAKA GOODS AND SERVICES TAX ACT, 2017
\n1. M\/s. Columbia Asia Hospitals Private Limited, (called as the 'Applicant' hereinafter), having its registered office at The Icon, 2nd Floor, No.8, 80 feet Road, HAL Ill Stage, Indiranagar, Bengaluru 560075 has filed an application for Advance Ruling under Section 97 of CGST Act, 2017, KGST Act, 2017 read with Rule 104 of CGST Rules 2017 & KGST Rules 2017, in form GST ARA-01 discharging the fee of Rs. 5,000-00 each under the CGS<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n vices related to both taxable supply and exempted supply?” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e applicant has taken support of the provisions of section 7(1), section 2(30), section 2(47) of the Central Goods and Services Tax Act which define the “supply”, “composite supply” and “exempt supply” and states that as per entry no. 74 of the Notification No.12\/2017 – Central Tax (Rate) dated 28.06.2017, healthcare services are exempted from GST. However, supply of medicines (pharmacy), consumables and supply of food are taxable at different rates under GST. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of his claim. The applicant stated that there are certain services used in common to provide both taxable and exempted services. As per section 17 (2) of CGST Act, 2017, the applicant is entitled to avail credit of input tax paid on procurement of such goods and\/or services on proportionate basis to the extent attributable to outward taxable supplies of medicines and consumables. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n red person not to avail the credit of CGST paid on procurement of inputs, input services and capital goods which are attributable to supply of exempted services. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n xempt supplies. But the definition of taxable supplies includes those supplies of goods which are leviable to tax and chosen to be exempted under section 11 and hence the exempt supplies also fall under the category of taxable supplies and hence the supply of goods and services supplied by the applicant company in conjunction with the healthcare services fall under the definition of “composite supply” as the services of supply of food and medicines to the patients are as advised by the doctor or nutritionists. But in case where the supply of food is not as advised by the doctor or nutritionists and is supplied to the patients, then such supply of food cannot be treated as “naturally bundled” supplies and supplies made in conjunction with each other and hence are separate supplies and needs to be treated not as composite supplies But as far as medicines supplied to the inpatients are concerned, they form part of the healthcare services supplied to the concerned patients and hence are pa<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed in case of food and drinks supplied to patients. But in case where the supply of medicines and food and drinks form part of the supply of healthcare services and there is no choice for the patients to choose them separately, then they would form a composite supply with healthcare services being the principal supply. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rson shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business and the said amount shall be credited to the electronic credit ledger of such person.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" In Re: M\/s. Columbia Asia Hospitals Private LimitedGST2018 (12) TMI 474 – AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – 2019 (20) G. S. T. L. 154 (A. A. R. – GST)AUTHORITY FOR ADVANCE RULINGS, KARNATAKA – AARDated:- 13-11-2018AAR No. KAR ADRG 26\/2018 GSTSRI. HARISH DHARNIA, AND DR. RAVI PRASAD M.P. MEMBER Represented by Sri Naveen Rajapurohit, … Continue reading “In Re: M\/s. Columbia Asia Hospitals Private Limited”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15421","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15421"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15421\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n4. The applicant furnishes some facts relevant to the stated activity:
\na. The applicant states that he is a private limited company and is an international healthcare group operating a chain of modern hospitals across Asia. The Company is currently operating across six different states having eleven hospitals out of which six units are in the state of Karnataka. The Hospitals owned by the applicant are engaged in providing secondary and tertiary Healthcare services which in turn categorises as In-patient (IP)) and Out-patient (OP) services.
\nb. In case of inpatient services, the patients get admitted in the hospital for an invasive or non-invasive procedure. During the course of such treatment, all the necessary medicines, medical and non-medical consumables, implants, etc. are supplied to the patients. At the time of discharge, the charges for all the goods and services supplied would be collected by raising a consolidated<\/p>\n
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\nf. With these facts, the applicant has sought an advance ruling on the matters already enumerated above.
\n4.1 The applicant states that as per definition of “composite supply”, it can be inferred from the word “taxable supply” included in the definition of composite supply that it covers only such supplies which are subject to GST and not the exempt supplies. Therefore, in the instant case, though two or more supplies are naturally bundled, i.e. healthcare services, being exempt supply, the same cannot be treated as composite <\/p>\n
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\n6. The applicant states that under pre-GST regime, the applicant company was required to reverse the CENVAT credit availed on input material and input services consumed in the manufacture of the exempted products or provision of exempted services under rule 6 of CENVAT Credit Rules, 2004. However there was no requirement to reverse the amount of CENVAT credit availed in capital goods.
\n7. As per section 16(1) Of the CGST Act, “Every registered person shall, subject to such conditions and restrictions as may be prescribed and in the manner specified in section 49, be entitled to take credit of input tax charge<\/p>\n
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\n9. Based on the facts above, the applicant requests this Authority to clarify if,-
\n1) the Healthcare services provided, which is an exempt service along with other taxable supplies to in-patients and out-patients, can be construed as Composite supply?
\n a. If yes, is supply of pharmacy goods, consumables and canteen services forms part of such composite supplies, not liable to tax?
\n b. Valuation of IP pharmacy, if the same is treated as part of composite supply?
\n2) the said supply cannot be construed as a composite supply, is it correct to discharge GST liability only on supply of medicine, consumables and food that are supplied in conjunction with healthcare services and simultaneously availing input tax credit on GST paid on inputs and input services procured for providing supply of medicines and consumables?
\n3) the<\/p>\n
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\n (b) import of services for a consideration whether or not in the course or furtherance of business;
\n (c) the activities specified in Schedule I, made or agreed to be made without a consideration; and
\n (d) The activities to be treated as supply of goods or supply of services as referred to in Schedule II.”
\nThe applicant company is providing healthcare services, services of providing food, supply of medicines, etc. to the patients, both in-patient and out-patients for a consideration in the course of or furtherance of its business and hence the supply amounts to “Supply” under section 7 (1) of the Central Goods and Services Tax Act, 2017.
\n11.2 Sub-section (30) of section 2 of the Central Goods and Services Tax Act, 2017 defines “Composite Supply” as under:
\n“(30) “composite <\/p>\n
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\n11.4 The applicant has raised a question on valuation of the items of medicines and food and drinks when they form a part of the composite supply, the same needs to be answered as under:
\n(a) In case where the medicines and articles of food and drinks form part of the single price including the supply of healthcare services, then there is no need for separate valuation of the same; and
\n(b) In case where the same do not form a part of the composite supply but still are supplied for a single price, then they would constitute a mixed supply and the entire price received would be liable to be taxed at the highest rate applicable to the goods or service supplied as per sec<\/p>\n
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\nSince the applicant is using the inputs and input services in the course or furtherance of his business, credit of such tax paid on such inward supplies can be claimed by him.
\n11.6 Sub-section (2) of section 17 of the Central Goods and Services Act 2017 reads as under:
\n“(2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax<\/p>\n
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