Hospital Occupational Health Check Service is a health care service, no GST payable: AAAR

The Gujarat Advance Ruling Appeal Authority (AAAR) composed of Seema Arora and Milind Torawane ruled that no GST is payable on the occupational health check service by the hospital as it was covered by health care services.

The appellant, M/s. Baroda Medicare Private Limited operates 3 multi-specialty hospitals under the brand “Sunshine Global Hospitals” in Manjalpur, Vadodara and Surat.

The hospital requested an advance ruling on whether the supply of drugs, surgical items, implants, consumables and other related services and items provided by the hospital through its pharmacy internal is part of the composite healthcare offer and is therefore not taxable under CGST/SGST.

Another issue raised was whether the hospital’s provision of Occupational Health Checkup (OCH) services to its employees as well as camps organized for health checkups outside hospitals should be treated as health services. and therefore not taxable under the CGST/SGST.

The AAR has determined that the supply of drugs, surgical items, implants, consumables and other related items provided by the hospital through its in-house pharmacy as part of the provision of Health care, together with the provision of food and room on rent to inpatients admitted to hospital for diagnosis, medical treatment, or procedures, is a composite provision of inpatient health care services.

The AAR also ruled that the hospital must pay 18% GST on payments received directly from the business entity for health services provided to employees of the business entity as part of an occupational health check. (OHC) or preventive care.

The Appellant appealed the AAR’s order. The Appellant argued that certain hazards are common to all industries, such as hazardous substances, dust, machinery accidents, trips and falls, physically demanding work, heat and cold, etc. security processes in place and have an individual’s health checked regularly. In many companies, it becomes mandatory to do a health check before even hiring an employee. Occupational health checks may be required for a variety of staff, at different stages of their occupation, beginning before a new person is assigned to a particular position.

The appellant argued that the services rendered by the appellant do not fall within the definition of social services. Occupational health checks are in the nature of health services.

The AAAR varied the AAR’s decision.

The AAAR found that “the provision of an occupational health check-up service by the hospital, i.e. nurses, doctors, paramedics on the hospital payroll working in different companies to provide health check-up services, ambulance and related medical services to their employees and also camps organized for health check-up outside of hospitals should be treated as health care service and exempted from GST in terms of entry in Sr.No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No.12/2017-State Tax (Rate) dated 30.06.2017. “

Name of caller: Baroda Medicare Private Limited, Sunshine Global Hospital

Reference: GUJ/GAAR/R/106/2020

As of 30.12.2020

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Richard F. Gandhi