2025-VIL-51-AAR
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SGST Advance Ruling Authority

GST – Tamil Nadu AAR - Composite supply, Health care services, Medicines and consumables for in-patients, Medicines and consumables for out-patients - Applicant has established a pharmacy unit that supplies medicines to both in-patients and out-patients - Whether the supply of medicines and consumables used in the course of providing healthcare services to in-patients would be considered as a "Composite Supply" of healthcare services and consequently avail exemption under Notification No. 12/2017, CT (Rate) read with Section 8(a) of GST - Whether the supply of medicines and consumables used in the course of providing healthcare services to in-patients is a composite supply of healthcare services and exempt from GST – HELD - The supply of medicines and consumables used in the course of providing healthcare services to in-patients by the pharmacy unit of the applicant is a composite supply of in-patient healthcare service - As per the definition of "Inpatient services" under SAC 999311, the services provided by hospitals to in-patients under the direction of medical doctors aimed at curing, restoring and/or maintaining the health of a patient, including medical, pharmaceutical and paramedical services, rehabilitation services, nursing services and laboratory and technical services till the patient's discharge, constitute a composite supply of service - Further, healthcare services provided by a clinical establishment are exempt under Sl. No. 74 of Notification No. 12/2017-CT (Rate) dated 28.06.2017. The clarification provided in Circular No. 32/06/2018-GST dated 12.02.2018, states that the entire amount charged by hospitals from patients, including the fee/payments made to doctors and the cost of medicines and consumables, is towards the healthcare services provided and is exempt - the supply of medicines and consumables used in the course of providing healthcare services to in-patients is a composite supply of in-patient healthcare service and is exempt from GST. However, the supply of medicines and consumables used in the course of providing healthcare services to out-patients is not part of the composite supply of healthcare service and is taxable to GST, except for the exempted healthcare service – Ordered accordingly - Whether the supply of medicines and consumables used in the course of providing healthcare services to out-patients is a composite supply of healthcare services and exempt from GST – HELD - In the case of out-patients, the medicines and consumables prescribed by the doctor are of an advisory nature, and the out-patients are not mandated to procure them only from the hospital's pharmacy. They are at liberty to procure the same from the hospital or other pharmacies of their choice - While the food supplied to in-patients as advised by the doctor/nutritionist is part of the composite supply of healthcare and not separately taxable, the other supplies of food by the hospital to patients who are not admitted are taxable, as per the clarification in the Circular No. 32/06/2018-GST dated 12.02.2018 - The supply of medicines and consumables used in the course of providing healthcare services to out-patients visiting the hospital for diagnosis, medical treatment or follow-up procedures cannot be considered as part of a composite supply involving the supply of healthcare service, as they are different supplies independent of each other. Therefore, except for the exempted healthcare service, all other supplies, including medicines, consumables, food, etc., in the case of supplies to out-patients are taxable to GST.
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