No GST on healthcare services under membership plans by multi-super speciality hospitals: AAR

Healthcare services provided under a membership scheme run by multi-super specialty hospitals to its members and their families were not taxable and will not face goods and services tax, according to a recent tax ruling by Gujarat Authority for Advance Ruling.

The Gujarat Authority for Advance Ruling (AAR) has held that healthcare services, where multi-super specialty hospitals take a lump-sum amount in form of membership to provide services to their family, would not attract GST.

The ruling came in response to an application by Divyajivan Healthcare LPP. It had approached the AAR seeking clarity on levy of GST on a membership plan in its proposed multi-super specialty hospital.

The applicant had also tied up with other hospitals in India where the members can avail health care services.

The applicant has sought the advance ruling on the issue whether this lump-sum amount received for Health care Services to be provided for 20 years by the applicant as “Diamond Plan” is exempted from GST as per the relevant notification issued by the government.

The Authority held that the scope of supply of services by the applicant was ‘health care services’ by a clinical establishment, which were exempted from GST.

The fact that the applicant had tied up with the other hospital for diagnosis, did not alter the scope of supply of health care services by the applicant to its service recipients, it said.

The Authority for Advance Rulings is a quasi-judicial body that assesses the potential tax liabilities for transactions beforehand. Its rulings are case-specific, but they have a persuasive impact on the tax assessment in cases of other firms under similar circumstances.