2026-VIL-108-AAR
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SGST Advance Ruling Authority

GST – Kerala AAR - Exemption on Healthcare Services - Composite Supply by Ayurvedic Clinical Establishment – Applicant is Ayurvedic hospital providing both inpatient and outpatient healthcare services - Whether the services provided by the applicant to inpatients, comprising medicines, consumables, room accommodation, and other ancillary supplies, constitute a composite supply of healthcare services eligible for exemption under Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) – HELD - The applicant, being an Ayurvedic clinical establishment providing diagnosis, treatment, and care under qualified medical practitioners, falls within the definition of "health care services" as defined under clause 2(zg) of the Notification - In the case of inpatients, medicines, consumables, dietary food, room accommodation, and other ancillary services are intrinsically and naturally bundled with the provision of medical treatment under continuous supervision of the clinical establishment, thereby constituting a composite supply as defined under Section 2(30) of the CGST Act, 2017 wherein the principal supply is healthcare service, and consequently the entire bundle qualifies for exemption under Entry No. 74 of the Notification No. 12/2017-Central Tax (Rate). However, notwithstanding the composite and exempt nature of inpatient healthcare services, the exemption does not extend to room rent exceeding Rs. 5,000 per day as amended by notification no. 04/2022-Central Tax (Rate) dated 13.07.2022 – Ordered accordingly - Whether the services provided by the applicant to outpatients, comprising medicines, consumables etc. constitute a Composite Supply of healthcare services eligible for exemption – HELD - In the case of outpatients, since the hospital primarily provides consultation and the patient is not admitted, there is no continuous or naturally bundled course of treatment under the supervision or control of the hospital, the patient remains at liberty to procure prescribed medicines from any source, and accordingly, the supply of medicines to outpatients cannot be regarded as naturally bundled with healthcare services, making such supplies independent taxable supplies liable to GST at applicable rates.
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