Fees collected from nurses and psychologists for ‘imparting practical training’ are levied to GST, Karnataka Authority of Advance Ruling (AAR) held.
The bench of M.P. Ravi Prasad and Kiran Reddy T. has marked that ‘healthcare services’ can be described as a service via diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy. The petitioner is furnishing practical training to nursing students and psychologists, and therefore it is not covered by GST under healthcare services.
The applicant has been involved in furnishing healthcare services by running a hospital. The applicant mentioned that they are furnishing the treatment to the inpatients who are suffering from psychic disorders, substance use disorders, neurology, etc.
The applicant asks for an advance ruling on the matter of whether the supply of medicines, drugs, and consumables utilized to furnish the health care services to inpatients at the time of diagnosis and treatment at the time of admission of patients to the hospital would be deemed “composite “supply” authorizing for exemption under the category of “health care services” as per the Notification of Services Exempt.
Important: KAAR: GST Exemption on Supply of Food, Medicines, Drugs, etc. to In-Patients of a Hospital
An additional problem was raised if the supply of food to inpatients would be regarded as a “composite supply” health care services under the CGST Act, 2017 and the KGST Act, 2017, and, therefore, under the Services Exempt Notification can be waived. Whether Goods and Services Tax applies to money kept by the applicant. Whether GST is waived from fees accumulated by nurses and psychologists for imparting practical training.
The applicant laid on Section 2 (30), which depicts ‘composite supply’. “Composite supply” signifies a supply incurred via a taxable person to a recipient that comprises two or more taxable supplies of goods or services or both or any combination which are naturally bundled and supplied in conjunction with each other in the normal operation of the business, one of them is a principal supply.
The room, medicines, consumables, and food provided for furnishing the treatment to the patients admitted to the hospital are naturally bundled in the regular business functioning, and the main supply is health care services, which is the principal component of the composite supply, the other supplies like room, medicines, consumables, and food are incidental or ancillary to the predominant supply.
The medicines, drugs, and consumables supply utilized in providing health care services to inpatients during diagnosis and treatment would be considered a “composite supply” of health care services qualifying for exemption as per entry No. 74(a) of Notification No. 12/2017-Central Tax (Rate) dated June 28, 2017, AAR stated.
The supply of food to inpatients will be considered a “component supply” of health care services authorizing for exemption, AAR mentioned.
| Applicant Name | Spandana Rehabilitation Research and Training Centre Private Limited |
| GSTIN of the applicant | 29AAJCS3207R1ZP |
| Date | 29.01.2024 |
| Represented By | Shri Mohammed Shabbir |
| Karnataka GST AAR | Read Order |