Starcare Hospital Kozhikodi Private Limited – 2019 (24) G.S.T.L. 802 (A.A.R. – GST – Kerala)

Medicines, consumables, surgical items etc. supplied while providing health care services to inpatients for diagnosis or treatments which are naturally bundled, would be considered as ‘Composite Supply’ eligible for exemption from GST

Facts: Hospital is giving medical services with experienced professionals. They have categorised the patient as in-patient and out- patient for administrative convenience. The out-patient are those who visit the hospital for routine check-up or clinical visit. The in- Patient are those who are admitted into the hospital for required treatment. The in-patient are provided with facilities like accommodation, medicines, consumables, dietary foods including surgical procedures required for the treatment.

Issue: Whether the supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent used in the course of providing health care services to inpatients for diagnosis or treatments which are naturally bundled and are provided in conjunction with each other, would be considered as ‘Composite Supply’ and eligible for exemption under the category ‘health care services’ under SI. No. 74 of Notification No.12/2017-CT(R), dated 28-6-2017.

Held: The AAR held that the supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent used in the course of providing health care services to inpatients for diagnosis or treatments which are naturally bundled and are provided in conjunction with each other, would be considered as ‘Composite Supply’. The inpatient is under continuous monitoring of the doctors and nursing staff and administration and dosage of medication is all under the control of the doctor and the nursing staff. The entire treatment protocol is documented and recorded. Thus, it is dear that in case of an inpatient, the hospital provides a bundle of supplies which is classifiable under health care services eligible for exemption under SI. No.74 of Notification No.12/2017-CT(R), dated 28-6-2017The entire supply is covered under composite supply with health care services as principal supply.

Thus, it is clear that in case of in-patient the hospital provides bundle of supplies which is classifiable under health care services eligible for exemption under Entry no. 74.

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