Supply of Healthcare Services and Medicines is aComposite Supply and also Exempted from GST
Facts of the Case:
M/S. INNOVATIONS MEDI RESEARCH PRIVATE LIMITED is involved in supply of healthcare services and supply of medicines and other procedures during treatment in patients admitted to hospital. The ruling determines whether such supply qualifies as a composite supply or not.
The ruling examines whether the principal supply, i.e., healthcare services falling under SAC 999311, is exempted under SI. No. 74 of notification no. 12/2017 CGST Rate dated 28-06-2017.
Analysis of the Case:
The applicant M/s Innovations Medi-research Private Limited is providing treatment to the patients suffering from Cancer. The applicant submitted that the unit of applicant i.e M/s Asian Cancer Hospital, is providing Treatment of patients suffering from Cancer. The applicant has asked the advance ruling in respect of treatment of in patient in M/s Asian Cancer Hospital.
The applicant supply of medicines and other procedures to in-patients admitted to hospital during treatment. Thus, applicant is involved in supply of service as well supply of goods i.e medicine along with taxable as well as exempt supply.
It is observed that the supply made by applicant is exempt under entry 74(a) of notification no. 12/2017-CGST Rate dated 28-06-2017.
SW Point of View:Thus, we understood that the supply to the in-patients by the hospitals, as advised by the doctor may be a part of composite supply of healthcare and not separately taxable, supplies made in course of providing treatment to patients admitted in hospital is undoubtedly naturally bundled in ordinary course of business. Principal supply i.e. healthcare service is predominant element of composite supply and other supplies such as room, medicines, implants, consumables and incidental or ancillary to predominant supply. Thus, considering definition of health care services and above discussions, we held that these goods supplied to in-patients are component of composite supply, where principal supply i.e. healthcare services are exempted.
Source: In re Innovations Medi research Private Limited (AAR Rajasthan) 2023 (6) TMI 488
