EN 
Facts: M/s. Kindorama Healthcare (P.) Ltd. (“the Applicant”) renders medical services with experienced professionals like doctors, nursing staff, lab technicians etc. The in-patients are provided with facilities for accommodation, medicines, consumables, implants, dietary foods including surgical procedures required for the treatment.
Issue Involved: Whether the supply of medicines and other services to in-patients in hospital would be considered as "Composite Supply” and qualifies for exemption under the category 'health care services' under SI No. 74 of Notification no.12/2017 CT(R) dated June 28, 2017?
Applicant’s contention: As per Service Classification Code 9993, healthcare services by a clinical establishment, an authorized medical practitioner or paramedics have been exempted from tax.
Held: The Hon’ble Authority for Advance Rulings, Kerala vide Advance Ruling No. KER/47/2019 dated April 12, 2019 held that the invoice raised for the treatment as an inpatient is a single bill charging for all the services utilized for the treatment in the hospital including room rent, nursing care charges, laboratory, consumables, medicines, equipment charges, doctor's fee, etc.
Thus, in case of an inpatient, the hospital has provided a bundle supplies which is classifiable under health care services.
"Composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply. As per Section 2(90) of the CGST Act, 2017, “principal supply" means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary.
Further the supply of medicines, consumables, surgical items, items such as needles, reagents etc used in laboratory, room rent used in the course of providing health care services to inpatients and patients admitted for a day procedure such as IVF for diagnosis or treatments which are naturally bundled and are provided in conjunction with each other, would be considered as "Composite Supply". The in-patient is under continuous monitoring of the doctors and nursing staff and administration. Hence, exempt as 'health care services' under SI No. 74 of Notification no.12/2017 CT(R) dated June 28, 2017.
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