Order Date: 29 July 2022

Facts-

• The Applicant, Kumaran Medical Centre is a registered partnership firm, has a Multispecialty hospital providing health care services and also maintains pharmacy, clinical laboratory, X ray and Scanning facility, Ambulance Service, Dietary Services etc.
• They have three different procurement mechanisms for the patients’ needs viz. General Store, KMC Pharma and Prabhat Pharma and separate accounting records are maintained. They have stated that for administration they have categorized the patients as Out-patients and In-patients.

Issue wise Ruling-

Issue- Whether the supply of medicines, drugs and other surgical goods to In-Patients during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of “composite supply” qualifying for exemption under the category of “healthcare services.”?

 The Authorities held that the Supply of Medicines and consumables used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures till discharge is a composite supply of In Patient Healthcare Service, provided the consolidated bill raised in the name of the patient indicates the supply of medicines and consumables during the course of provision of health care services, as defined is exempted GST for the period upto 17.07.2022. Effective from 18.07.2022, if the room charges [excluding ICU/CCU/ICCU/NICU] exceeds Rs.5000/- per day, the applicable rate of tax is 5% as per the Notification 11/2017 CT(Rate) dated 28.06.2017 as amended.

Issue- Whether the supply of medicines, drugs and other surgical goods to Out-Patients during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of “composite supply” qualifying for exemption under the category of “health care services.”?

 The Authorities held that the Supply of Medicines and consumables prescribed in the course of providing health care services to Out-patients of the hospital is not a composite supply and hence taxable to GST.

Issue - Whether the supply of Implants, Prosthetics and Mobility aids during the course of diagnosis and treatment of disease, illness, injuries, deformities and abnormalities would fall meaning of “composite supply” qualifying for exemption under the category of “healthcare services.”?

The Authorities held that the Supply of Implants which are implanted in the body essentially by means of a surgical procedure during the course of diagnosis and treatment for diseases, illness, injuries, deformities, abnormalities for in patients is to be considered as “Composite supply” of health care service, whereas the supply of prosthetics and mobility aids, being in the nature of independent supply are to be considered as individual and taxed accordingly.