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RE: M/S CMC VELLORE ASSOCIATION, 2019

Re: M/s CMC Vellore Association (2019, TN AAR)

ISSUE:

  • Whether the medicines, drugs, stents, consumables, and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures would be considered as a “Composite Supply” of health care services under GST and consequently can exemption under Notification No.I2/2OI7 read with. Section B(a) of GST be claimed?

RULE:

  • The supply of medicines, drugs, stents, consumables, and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply of health care services and is exempt from GST under Notification No.12/2017-CTR dated 28.06.2017.

FACTS:

  • M/s CMC Vellore Association is a multi-specialty tertiary care hospital that provides health care services.
  • The hospital has two categories of patients: out-patients and in patients.
  • Out-patients are those who visit the hospital for routine check ups or clinical visits.
  • In-patients are those who are admitted to the hospital for diagnosis, medical treatment, or procedures.
  • The hospital provides medicines, drugs, stents, consumables, and implants to in-patients as part of their treatment plan.
  • The hospital applied to the Authority for Advance Ruling (AAR) in Tamil Nadu for a ruling on whether the supply of medicines, drugs, stents, consumables, and implants to in-patients is exempt from GST under Notification No.12/2017-CTR dated 28.06.2017.

HELD:

  • The Authority for Advance Ruling (AAR) in Tamil Nadu held in the case of M/s CMC Vellore Association, 2019 that the supply of medicines, drugs, stents, consumables, and implants used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures is a composite supply of health care services and is exempt from GST under Notification No.12/2017-CTR dated 28.06.2017.
  • The AAR reasoned that the supply of medicines is incidental to the provision of health care services and is not a separate supply.
  • The medicines are provided to in-patients as part of the overall treatment plan and are essential for their recovery.
  • Therefore, the supply of medicines to in-patients is exempt from GST under Notification No.12/2017-CTR dated 28.06.2017.
  • The AAR’s decision was considered to be significant for hospitals and other healthcare providers, as it clarified that the supply of medicines to in-patients is exempt from GST.