GST exemption is not available on administration of Covid-19 vaccination: AAR

Case Details: Authority for Advance Rulings, Andhra Pradesh Krishna Institute of Medical Sciences Ltd., In re - [2022] 142 taxmann.com 376 (AAR-ANDHRA PRADESH)

Judiciary and Counsel Details

• • D. Ramesh & RV Pradhamesh Bhanu, Member
  • K.V. Suresh Babu for the Applicant.

Facts of the Case

The applicant was company which was running hospital and also supplies medicines through pharmacy to out-patients. It filed an application for advance ruling to determine taxability of administering of Covid-19 vaccination by hospitals.

AAR Held

The Authority for Advance Rulings observed that administering of Covid-19 vaccination involves sale of vaccine and administering of vaccine. Therefore, administering of vaccine by hospitals is in nature of composite supply as both supplies are intrinsically connected, naturally bundled and viewed as a single package.

However, the primary requirement would be receipt of vaccine of one’s own choice and thus, the principal supply shall be sale of vaccine and service charge of administering vaccine would be included in total value of composite supply. Thus, it was held that exemption from GST under healthcare services would not be available and GST would be payable at 5% on transaction as applicable to principal supply of sale of vaccine.