In-Patient Medicine Supply Exempt as Part of Health Care Services | AAR

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  • Last Updated on 23 July, 2025

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Health Care GST Exemption

Case Details: Believers Church India, In re - [2025] 176 taxmann.com 379 (AAR-KERALA)

Judiciary and Counsel Details

  • Jomy Jacob IRS & Mansur M.I., Member
  • Tony C. Kallukalam, CA for the Applicant.

Facts of the Case

The Applicant, a public religious and charitable trust engaged in rendering medical and educational services through its multi-specialty hospital and affiliated institutions, issued medicines, implants, and other supplies to in-patients during the course of their treatment. The Applicant contended that such supplies formed part of a composite supply of health care services and were exempt from GST. The Applicant relied upon Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate), dated 28-06-2017, which exempts health care services classified under Heading No. 9993. The Applicant further submitted that the exemption applied irrespective of whether the treatment was charged on a full package basis, partial package basis, or without any package, and even if the cost of medicines constituted a major share of the treatment expenses, provided the principal supply remained health care services. The matter was accordingly placed before the Authority for Advance Ruling (AAR), Kerala.

AAR Held

The AAR Kerala held that in the case of in-patients, the supply of medicines, implants, and other supplies issued during the course of treatment constitutes a composite supply of health care services. The AAR reasoned that the principal supply in such cases is the health care service itself, and all ancillary supplies naturally bundled with it are also covered under the exemption provided by Sl. No. 74 of Notification No. 12/2017-Central Tax (Rate), dated 28-06-2017. The AAR clarified that the exemption remains applicable regardless of the method of billing, whether on a full package, partial package, or itemized basis, and is unaffected by the proportion of medicine costs in the overall treatment charges.

List of Cases Reviewed

List of Cases Referred to

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied