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No GST on Medicines given to In-patients: AAR Ruling

However GST is applicable on medicines given to Out-Patients.

Issue under Advance Ruling?

The two main questions on which advance ruling was sought are as follows:

1. Whether the supply of medicines, drugs and other surgical goods to In-Patients during the course of treatment would fall meaning of “composite supply” and qualify for GST exemption under the category of “health care services.”?

2. Whether the supply of medicines, drugs and other surgical goods to Out-Patients would also qualify for above exemption?

What is In-Patient and Out-Patient?

(i) In-patient health care services: The patients are admitted to the Applicants hospital as in-patient. The patients are provided with stay facilities, dietary food for the treatment. They are also provided with medicines, drugs, stents, implants, other surgeries/procedures etc. as incidental to Health Care Services rendered in the Hospital.

(ii) Out-patient's consultancy: The out-patients patients visit the hospital for routine checkups, clinical visits and the hospital provides diagnosis to them. Medicines are prescribed to them as part of treatment.

Composite Supply?

Section 2(30) of CGST ACT states:

(30) “composite supply” means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

GST Exemption on Health Care Services?

Health care services provided by a clinical establishment or an authorized medical practitioner or para medics are exempted vide Sl. No 74 of Notification no 12/2017-CT(Rate).

Clinical establishment: “Clinical establishment” is defined in the said notification under 2(s), which states that “Clinical Establishment” means a hospital, nursing.......
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Author:

TaxReply


Aug 27, 2022

Comments


Where hospital purchases medicines by payment of tax and same is used for in-pationtes, whether ITC will have to be reversed to that extent ? If yes, then what is the relief ?
By: Dhirenkumar Gandhi
Aug 27, 2022
Please give me some additional discount for annual subscription. I am Superintendent at CGST Varanasi and subscribing in person. I subscribed last year also.
Thanks
By: Vinay Kumar Mishra
Aug 27, 2022
OK
By: Sangita Patel
Jul 4, 2023


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