The Karnataka Advance Ruling Authority (AAR) recently held that providing services of diagnosis, pre and post counseling, therapy and prevention of diseases by providing test would not attract Goods and Services Tax (GST) as the same would constitute “ Health Care Services. ”
The applicant, in the instant case, is engaged in providing services such as diagnosis, pre and post counseling, therapy and prevention of diseases by providing tests. They approached the advance ruling authority claiming that the activities provided by them would constitute ‘Health care services’ for which, tax exemption is available under the GST regime.
As per a Notification issued by the Central Government in June 2017, health care services by a clinical establishment, an authorized medical practitioner or para-medics are exempted services.
As per the Notification, “health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.
The Authority observed that all treatment or diagnosis or care for illness, injury, deformity, abnormality or pregnancy by a clinical establishment is eligible for exemption. Such services provided by doctors or paramedics either provided as an employee or in their individual capacity is also exempted.
Allowing the contentions of the applicant, the Authority noted that they are involved in providing services of diagnosis, pre and post counselling, therapy and prevention of diseases by providing test that is sophisticated and relevant, medical team of applicant facilitates diagnosis process and, therefore it qualifies to be a clinical establishment for which nil rate of tax is applicable.
