The supply of Occupation Health Checkup Service is GST exempt.
Facts and Issue of the case
The appellant, M/s. Baroda Medicare Private Limited is running 3 multi- specialty hospitals under the Brand name ‘Sunshine Global Hospitals’ at Manjalpur, Vadodara and Surat. The appellant filed an application for advance ruling before the Gujarat Authority for Advance Ruling (herein after referred to as the ‘GAAR’). Aggrieved by the aforesaid Advance Ruling, to the extent ruling given in respect of question (ii), the appellant has filed the present appeal. The appellant has submitted that some hazards are common for all industries, like hazardous substances, dust, machinery related accidents, trips and falls, physically demanding work, heat and cold, etc. It has been submitted that the best way to avoid any accident to happen is to have preventive & safety process in place and get an individual’s health check done regularly; that in many companies, it is becoming mandatory to have a pre-employment health check-up done even before hiring an employee. The appellant has submitted that the occupational health checks can be required for variety of staff, at various stages of their occupation, starting before a new person is assigned to particular job.
The appellant has submitted that these are the services which are provided by any clinical establishment through their Nursing staff, Doctors, Paramedical staff etc. at their place to look after any medical emergencies, medical treatment, health check-up of organization staff. It has been submitted that the primary purpose is to offer timely health check-up, medical treatments, and other allied medical services as and when required by the organization towards their staff needs in the workplace and allow the employer to make changes to improve worker health and safety. It has further been submitted that occupational health is defined as the highest degree of physical, mental and social well-being of workers in all occupations; it is the branch of healthcare which deals with all aspects of health and safety at the workplace; it lays strong emphasis on the prevention of hazards at a primary level. It is submitted that occupational health is essentially preventive medicine.
The appellant has requested to grant exemption as per Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. There has been change in one of the two Members of this authority consequent upon the transfer and posting of the Chief Commissioner, Gujarat Goods and Services Tax, after Personal Hearing has been held in this case. The appellant was therefore given fresh hearing on 22.03.2022. The authorized representative of the appellant appeared for the personal hearing, which was conducted online on 22.03.2022, and re-iterated the contents of the appeal and also the additional written submission made vide their letter dated 10.08.2021. In view of the submissions made he requested to grant exemption as per Entry 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and set aside the ruling of GAAR in respect of Question No. 2.
Observation of the court
Court has considered the submissions made by the appellant in the appeal filed by them, in the written submissions as well as at the time of personal hearing, ruling given by the GAAR and other evidences available on record.
The issue raised by the appellant in the present case is whether the supply of Occupational Health Check – up service by the hospital i.e. nursing staff, doctors, paramedical staff on hospital’s payroll, working in different corporate for providing health check-up service, ambulance facility, and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals, to be treated as Health Care service and hence not taxable under CGST/SGST.
The appellant has claimed that the aforesaid services proposed to be provided by it are covered under Entry at Sr. No. 74 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017. The appellant under their proposed agreement of Occupational Health Checkups will provide round the clock Doctors, Nurses, medical assistants, Paramedical staff etc for offering treatment, diagnosis, and allied healthcare services at the site of their recipient unit. The consideration will be based on the requirements of the recipient unit. The above personnel deployed at the unit shall look after emergencies, medical treatment, medical check-ups etc of the employees of the unit. They will be carrying out regular health check up of employees viz. pre-employment health check up ; prevent work related injuries, diseases and potential health hazards; monitor health status at periodic intervals ; providing immediate treatment as when required which may involve getting ambulance services in case patient needs ICU or immediate hospital admission.
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 is covered under the definition of “health care service” provided at clause (zg) of para 2 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. The GAAR in para 15.1 held that the purposes of Occupational Health Check-ups are:
- whether the person is fit for employment to the particular post,
- Prevention of work related injuries, diseases and potential health hazards,
- Monitoring the health status of the employees,
- Arrangement of treatment if the need arise,
- Checking of fitness of the employee for the purpose of resumption of duty and
- assessment of the work condition with a view to ascertain that a particular employee can work under such conditions or otherwise. However GAAR erred in holding that Health Care Services do not include the services of Occupational Health Check-ups or preventive care. The Occupational
Health Check-ups or preventive care is covered under Service Code 999312. This code includes: “ i. general medical services consisting of the prevention, diagnosis and treatment by doctors of medicine of physical and / or mental diseases, such as:
consultations
physical check-ups etc. Note: These services are not limited to specified or particular conditions, diseases or anatomical regions. They can be provided in general practitioner’s practices and also delivered by outpatient clinics at home, in firms, schools etc. or by phone , internet or other means …..Note: These services can be provided in specialized practitioner’s practices and also delivered by outpatient clinics, at home , in firms , schools etc. or by phone, internet or other means” The services to be provided by the appellant very well covers under the referred code. And that the above entry specifically merits classification at Entry No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as the said Service Code is wide enough to cover general medical services consisting of the prevention, diagnosis and care and they can be provided in general practitioner’s practices and also delivered by outpatient clinics at home, in firms, schools etc or by phone, internet or other means.
It is clear that objective of medical examination is diagnosis. The definition of diagnosis, as per Cambridge dictionary means a judgement about what particular illness or problem is, made after examining and as per freedictionary.com is the act of process of identifying or determining the nature and cause of a disease or injury through evaluation of patient’s history, examination and review of laboratory data, are broad enough to include occupational health check –ups within the meaning of word diagnosis. Further, occupational health check-ups provide preventive care which falls in the scope of the word ‘care’.
As per Entry at Sr. No. 74 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017 Health Care Services must be supplied by clinical establishment, an authorized medical practitioner or para-medics and these services are not limited to specified or particular conditions, diseases or anatomical reasons as well as these services can be provided in general practitioner’s practices and also delivered by outpatient clinics, at home, in firms, schools etc or by phone, internet or other means.
In view of above definition of Health Care Services, it is clear that there is no disparity when provided by a clinical establishment to a patient inside the clinical establishment or outside the said establishment. In para 16 of ruling passed by GAAR, it was held that occupational health check-ups are classified under ‘Human Health and Social Care Services in terms of Sr. No. 31 of the Notification No. 11/2017-CT (Rate) dated 28.06.2017. Court finds that GAAR has classified the service under major heading 9993 as mentioned at Sr.31 the Notification No. 11/2017-CT (Rate) dated 28.06.2017. The said major or group code has been granted exemption under Sr. No. 74 of exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 as amended. The GAAR has failed to examine as to whether the description of service provided by the appellant is covered within the description of service given at Sr. No. 74, of the said exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, as amended. As discussed at Para 14.3 above the service to be provided by the appellant viz. Occupation Health Check Ups wherein they will provide round the clock Doctors, Nurses, Medical assistants, Para-medical staff/ personnel for offering treatment, diagnosis , allied healthcare services to the recipient of supply at their site is very well covered under SAC 999312. The said service is covered within the description of service mentioned at Sr. No. 74 of above referred exemption notification.
Further, in previous Service Tax regime, vide Notification No. 24/2010-ST dated 22.06.2010 and Section 65(105) of the Finance Act, 1994, whereby Service Tax was made applicable on Occupational Health Check-up Services. The Government subsequently exempted the above service vide Notification No. 30/2011-ST dated 25.04.2011. The definition of Health Care Service is similar in GST regime as compared to Finance Act, 1994. Court finds that the GAAR failed to appreciate the same. The appellant has not submitted any agreement related to occupational health check up service proposed to be provided by it, either before the GAAR or this Authority, as this is a proposed activity and no such agreement has yet been entered into. It is observed that the appellant has not started providing occupational health check-up services.
In view of the foregoing, court modifies the Advance Ruling No. GUJ/GAAR/R/106/2020 dated 30.12.2020 of the Gujarat Authority for Advance Ruling in the case of M/s. Baroda Medicare Pvt Ltd, Sunshine Global Hospital with respect to Question No. 2 and hold that supply of Occupation Health Check- up Service by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital’s payroll working in different corporate for providing health check-up services, ambulance facility and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals to be treated as Health Care Service and exempted under GST in terms of Entry at Sr.No.74 of Notification No.12/2017-Central Tax (Rate) dated 28.06.2017 and Notification No. 12/2017-State Tax (Rate) dated 30.06.2017, as amended.
Conclusion
Court held that supply of Occupation Health Check- up Service by the hospital i.e. nursing staff, Doctors, Paramedical staff on hospital’s payroll working in different corporate for providing health check-up services, ambulance facility and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals to be treated as Health Care Service and exempted under GST.
In-re-Baroda-Medicare-Private-Limited-GST-AAAR-Gujarat
