Whether the society,
engaged in medical education and satisfying criteria of an "Educational Institution,"
is obliged to comply with GST provisions.
Appellate
Authority For Advance Rulling - Maharashtra
Application
No. : MAH/AAAR/DS-RM/13/2022-23 Date:
05-12-2022
M/s Kasturba
Health Society
Facts of the Case:
Kasturba
Health Society is involved in providing medical education and health care
services. They voluntarily registered under the GST Act due to pressure from
suppliers and service providers but faced practical difficulties and did not
file any returns until March 2019, believing their activities were not in the
nature of "business" under the GST Act.
Services or Goods Supplied by Applicant:
·
Medical education through Mahatma Gandhi
Institute of Medical Sciences (MGIMS)
·
Health care services through Kasturba
Hospital
Questions Raised by Applicant:
1.
Whether the society, engaged in medical
education and satisfying criteria of an "Educational Institution," is
obliged to comply with GST provisions.
2.
Whether the society is liable for
registration under GST or can remain outside its purview.
3.
Whether the fees and charges received from
students and patients constitute "outward supply" under GST.
4.
Whether the cost of medicines and consumables
recovered from patients falls under "composite supply" qualifying for
exemption.
5.
Whether nominal charges received under the
"Unparallel Health Insurance Scheme" fall within the meaning of
"supply" eligible for exemption.
6.
Whether amounts received for making space
available for banking, parking, refreshment, and disposal of wastage fall
within the meaning of "supply" qualifying for exemption.
Relevant Sections:
·
Section 2(17) of the CGST Act, 2017:
Definition of "Business"
·
Section 22 of the CGST Act, 2017: Persons
liable for registration
·
Section 23 of the CGST Act, 2017: Persons not
liable for registration
·
Notification No. 12/2017-C.T. (Rate):
Exemptions for health care services
Submission by Applicant:
The
applicant argued that their activities are not business ventures but integral
parts of health care services and educational activities, which should be
exempt from GST. They cited various court judgments to support their contention
that their activities under the "Arogya Sewa Scheme" and other
incidental activities (like rental income from parking and canteen services)
should also be exempt from GST.
Findings and Decision by Ruling Authority:
The
Appellate Authority carefully reviewed the facts, submissions, and the order by
the Maharashtra Authority for Advance Rulings (MAAR). It examined the
definition of "Business" under GST law and concluded that the scope
of "business" includes various activities, whether for pecuniary
benefit or not. The authority held that:
1.
The applicant's activities do constitute
"business" under GST.
2.
The fees and charges received from students
and patients are considered "outward supply" and fall under GST.
3.
The nominal charges under the
"Unparallel Health Insurance Scheme" and incidental activities (like
parking and canteen services) are part of the health care services and are
exempt under the relevant notification.
Conclusion:
Kasturba
Health Society's activities are considered business under the GST Act, making
them liable for registration and compliance. However, specific health care
services and nominal charges related to these services are exempt from GST
under Notification No. 12/2017-C.T. (Rate). The detailed ruling provides
clarity on the GST obligations for charitable institutions engaged in
educational and health care services, distinguishing between taxable and exempt
supplies.
Disclaimer: All the Information is based on the notification, circular
and order issued by the Govt. authority and judgement delivered by the
court or the authority information is strictly for educational purposes and on the
basis of our best understanding of laws & not binding on anyone.
