The Telangana Authority of Advance Ruling (AAR) ruled that 5% GST applicable to food supplied to hospitals including Government Hospitals, Private Hospitals, and Autonomous Bodies on outsourcing basis, with the condition of non-availability of an input tax credit.
The Applicant, M/s. Navneeth Kumar Talla deals with supply of food to MNG Cancer Hospital Hyderabad (Autonomous Body) on an outsourcing basis to patients of MNG Cancer Hospital.
The applicant has sought the advance ruling on the issue whether Food supplied to Hospitals i.e. Government Hospital, Private Hospitals and Autonomous Bodies on outsourcing basis, GST is chargeable.
The Applicant further asked that if GST is chargeable what is the tax rate and if no GST is chargeable on the Supply of food, the GST already paid by the Hospitals and remitted to Government is recoverable from their future bills.
The Authority consists of the Additional Commissioner of State Tax, J. Laxminarayana, and the Joint Commissioner of Central Tax, B. Raghukiran ruled that 5% GST is chargeable on food supplied to the hospital i.e. Government Hospitals, Private Hospitals, and Autonomous Bodies on outsourcing basis the GST is chargeable.
“The supply of food to hospitals by the applicant depends on the time period (during which they are supplied) and will be subjected to tax as per the provisions of Notification No. 11/2017 – State Tax (Rate), issued in G.O.Ms No. 110, Revenue (CT-II) Department, Dated. 29-06-2017 amended from time to time,” the AAR said.
The Authority further ruled that for the period from July 01, 2017, to July 26, 2018, 18% of GST must be paid and for the period from July 27, 2018, onwards 5% of GST must be paid, provided that credit of input tax charged on goods and services used in supplying the service has not been taken.
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