GST – AAAR Maharashtra: Cost of medicine and consumables recovered from OPD patients along with nominal charges collected for diagnosing by pathological investigation is composite supply of main health care supply and hence is exempt – Advance received for provision of health care service under the scheme is exempt - Amount received for providing space for facilities like Banking, parking, canteen etc. are taxable – AAR decision partially modified [Order attached]
Order date – 05 December 2022
- The Applicant, M/s. Kasturba Health Society, emerged as Charitable Institution with the sole objective of attending the health needs of rural India.
- The Appellant is existing solely for imparting the Medical Education, till Post Graduation, as a Joint Venture having funding from Central Government @50%, State Government @ 25% and remaining 25% comes mainly by way of Fess from Students and Patients. The Appellant is having its setup in form of "Medical College" named as "Mahatma Gandhi Institute of Medical Science” which is attached with clinical laboratory named as "Kasturba Hospital".
- On introduction of GST the Appellant without having the GST registration No. was facing the practical difficulties, and therefore, it got registered with GSTN, which is duly cancelled by the jurisdictional GST authorities after considering their nature of activity and having convinced that they are not liable for registration.
- Whether the applicant is liable for GST ?
- Whether the nominal charges received from patients towards an "Unparallel Health Insurance Scheme" would fall within the meaning of "supply" and is eligible for exemption under the category of "Educational and/or Health Care Services."?
- Whether the nominal amount received for making space available for essential facilities needed by the students and staffs such as Banking, Parking, Refreshment etc. which are Support activities for attainment of main activities and further amount received on account of disposal of wastage would fall within the meaning of "supply" qualifying for exemption under the category of "educational and/or health care services."?
- The AAAR observed that the services of medical education provided by the Appellant-Society is recognized by the Maharashtra University of Health Sciences, Nashik and Nagpur University, MGIMS, an establishment of the Appellant Society, falls under the category of "educational institution" as defined under the GST law, and accordingly, it is held that the medical education services provided by the Appellant to the students will attract nil rate of GST as per the entry 66 of Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.
- Since the Appellant-Society, through its establishment Kasturba Hospital are engaged in providing Services by way of diagnosis or treatment or care of the patients, hence, their services can be righty Termed as "health care services", and accordingly, it is held that the said services will be exempt from the payment of GST in term of the entry at SI. No. 74 of above Notification.
- The fees and other charges received from students and recoupment charges received from patients would constitute as a consideration for "outward supply" as defined in section 2 (83) of the CGST Act, 2017 and the supply of educational services or health care services, against which both these charges are collected by the Applicant, are exempted supplies in terms of the entries at SI. No. 66 and Sl. No. 74 of the Notification No. 12/2017-C.T. (R) dated 28.06.2017
- The charges collected under the "Unparallel Health Insurance Scheme are to be considered as advance towards the provision of the health care services to the subscribers of this scheme, and accordingly, any amount collected towards this scheme will not be subjected to levy of GST in terms of the entry at SI. No. 74 of the exemption Notification No. 12/2017-C.T. (Rate) dated 28.06.2017.
- The amount received by the Appellant for rendering renting of immovable property services will be considered as separate and independent supplies, and will be taxable at the rate of 18% in terms of the item (ii) bearing the description "Real estate services other than (i) and (ii) above" of the entry at SI. No. 16 of the Notification No. 1 1/2017- C.T. (Rate) dated 28.06.2017 whereas, the charges received against the disposal of wastes will be subject to levy of GST as the supply of wastes to the vendors would be construed as independent and separate supply, attracting the levy of GST at the applicable rate prescribed under Notification No. 01/2017-C.T. (Rate) dated 28.06.2017
- Hence, it is concluded that the Appellant-Society are liable to take registration in terms of section 22(1) of the CGST Act, 2017 provided their aggregate turnover exceeds the threshold limit prescribed under the said Act.