Case Details:

ST. Thomas Hospital

Appeal No.:

Advance Ruling No. Ker/108/2021

Ruling pronounced by:

AAR Kerala

Date of Ruling:

26-05-2021

Issue

Ruling

Issue-1: Whether the medicines, surgical items, implants, stents and other consumables used in the course of providing health care services to inpatients admitted to the hospital for diagnosis, or medical treatment would be considered as “Composite Supply” of healthcare services under GST and consequently can exemption under Notification No. 12/2017 read with Section 8(a) of GST be claimed?

The Supply of medicines, surgical items, implants, stents and other consumables to inpatients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply where the principal supply is healthcare services falling under SAC 999311 which is exempted as per entry at Sl. No. 74 of Notification No. 12/2017 CT (Rate) dated 28-06-2017.

Issue-2: Whether the supply of food to all the inpatients would be considered as “Composite Supply” of healthcare services under GST and consequently can exemption under Notification No. 12/2017 read with Section 8(a) of GST be claimed?

The supply of food to inpatients admitted to the hospital for diagnosis, or medical treatment or procedures is a component of the composite supply where the principal supply is healthcare service falling under SAC 999311 which is exempted as per entry at sl.no. 74 of Notification No. 12/2017 CT (Rate) dated 28.06.2017.

Issue-3: Whether, for the availment of ITC on common purchase of medicines and surgical items which are ultimately supplied on actual basis to inpatients and outpatients, the following formulae is correct:

Ruling: The eligibility of credit of tax paid on the inputs and input services used for taxable as well as exempted supplies are governed by the provisions of Section 17(2) of the CGST Act, 2017 and Rule 42 of the CGST Rules, 2017. The eligible ITC shall be calculated as per the formula prescribed in Rule 42 of the CGST Rules, 2017.