Order Date – 29 January 2024

Facts –

• The Applicant, M/s Spandana Rehabilitation Research and Training Centre Private, are engaged in providing health care services by running a hospital. They are providing treatment to in-patient suffering from psychic disorder, substance use disorder, Neurology, etc.

Issue –

• Whether the supply of medicines, drugs, consumables would be considered as composite supply and qualify for exemption under category of Health care services

Order –

• The AAR observed that the Applicant is a hospital hence, the same is covered under clinical establishment and since the hospital is providing treatment to in-patient suffering from psychic disorder, substance use disorder, Neurology, etc., the same is covered under health care services. Hence, the room charges, medicines, consumables and food supplied in the course of treatment to the patients admitted in the hospital (in-patient) are undoubtedly naturally bundled in the course of business and the principal supply is health care service which is prominent element of composite supply.
• Further, it was held that the entire amount charged by the hospital from the patient including the retention money and the fee/payment made to the doctors etc. is towards the health care services provided by the hospital to the patient and is exempt.
• However, it was held that the practical training provided by the Applicant to nursing students psychologist is not covered under the definition of health care services and hence GST is not exempted on fees collected from nurses and psychologist for imparting practical training.