Classification of service— In the instant case, the applicant has sought Advance Ruling on the following questions:

1. Whether the Supply medicines and consumables used in the course of providing health care services to In-patients by pharmacy unit of Be well hospitals for diagnosis or treatment during the patients admission in hospital would be considered as “Composite Supply” of health care service as under GST and consequently avail exemption under Notification No.12/2017-CT (Rate) read with Section 8(a) of GST?

2. Whether the supply of medicines and consumables used In the course of providing health care services to out-patients by pharmacy unit of the Be well hospitals for diagnosis or treatment would be considered as “Composite Supply” of heath care services under GST and consequently avail exemption under Notification 12/2017 CT (rate) read with Section 8(a) of GST?

In this case, supply of health services is the principal supply as that is the reason the in-patients get admitted to hospital instead of buying the medicines or consumables and using on themselves. Therefore, supply of medicines and consumables to in patients in the course of their treatment till the patient is discharged is a composite supply of health services. However once the patient is discharged, the composite supply comes to an end and the review of the patient subsequent to discharge cannot be considered as part of the composite supply.

Held that— 

1. Supply of Medicines and consumables used in the course of providing health care services to in-patients admitted to the hospital for diagnosis, or medical treatment or procedures till discharge is a composite supply of In Patient Healthcare Service, provided the consolidated bill raised in the name of the patient indicates the supply of medicines and consumables during the course of provision of health care services, as defined in Para 2 (zg) of Notification no 12/2017-C.T. (rate) dated 28.06.2017 as amended and Notification No.II (2)/CTR/532(d-15)/2017 vide G.O. (Ms) No. 73 dated 29.06.2017 as amended and the same is exempted from CGST and SGST as per SI No 74 of the above notifications respectively.

2. Supply of Medicines and consumables used in the course of providing health care services to Out-patients admitted to the hospital for diagnosis, or medical treatment or procedures is not a composite supply and is hence taxable to GST.