Supply of Medicines and drugs in course of providing health care services exempt from GST [Read AAR]

The Karnataka Authority of Advance Ruling (AAR Karnataka) in the matter of M/s SPANDANA REHABILITATION RESEARCH AND TRAINING CENTRE PRIVATE LIMITED has ruled out that the Supply of Medicines and Drugs in the course of providing health care services exempt from GST.

The applicant is a Private Limited Company registered under the provision of the Central Goods and Services Tax Act, 2017, as well as Kamataka Goods and Services Tax Act, 2017 (hereinafter referred to as the CGST Act and KGST / SGST Act respectively. The Applicant states that they are engaged in providing health care services by running a hospital. The applicant states that they are providing treatment to in-patients suffering from psychic disorder, substance use disorder, Neurology etc.

The applicant has sought an advance ruling in respect of the following questions:

i. Whether the supply of medicines, drugs and consumables used in the course of providing health care services to in-patients during the course of diagnosis and treatment during the patient admission to the hospital would be considered as “Composite Supply” qualifying for exemption under the category of “health care services” as per Services Exempt Notification No. 12/ 2017-Central Tax (Rate) dated: 28-06-2017 read with Section 8(a) of the CGST Act, 2017/ KGST Act, 2017?

ii. Whether the supply of food to in-patients would be considered as a “Composite Supply” of health care services under CGST Act, 2017 and KGST Act, 201 7 and consequently, can exemption under Services Exempt Notification No. 12/2017-Central Tax (Rate) dated: 28-06-2017 read with Section 8(a) of GST be claimed?

iii. Whether GST is applicable on money retained by the applicant?

iv. Whether GST is exempt on Fees collected from nurses and psychologists for imparting practical training?

RULING

i. The supply of medicines, drugs and consumables used in the course of providing health care services to in-patients during the course of diagnosis and treatment would be considered as 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: 28-06-2017 subjected to the condition mentioned therein.

ii. The supply of food to in-patients would be considered as a “Composite Supply” of health care services qualifying for exemption as per entry No. 7 4(a) of Notification No. 12/ 2017-Central Tax (Rate) dated: 28-06-2017 subjected to the condition mentioned therein.

iii. GST is not applicable on money retained by the applicant.

iv. GST is not exempted on the fees collected from nurses and psychologists for imparting practical training.

For Official Ruling Download PDF Given Below: