#GSTCase-86-An overview over Cases regarding Taxability of Medical Diagnostic Centres in GST
CA Arpit Haldia
Case-1: M/s Sayre Therapuetics Private Limited-(AAR Karnataka)-21st March 2018-  93 taxmann.com 418 (AAR – KARNATAKA)
Held that services like services / facilities requiring diagnosis such as patient counselling, suggesting the relevant test for the patient, collecting samples, obtaining the result of the test, sharing the test results and post counselling are covered under health care services. (even though tests were carried out by some other agency)
|One of the tests made available in India by them through their tie-up with the US Company, is a microarray based gene expression test that aids in identifying challenging tumours, including metastatic, poorly differentiated and undifferentiated cancers. This test assumes significance, as current day precision therapy can be effective only if the site of origin is known. Similarly, they have collaborated with a molecular diagnostic company from Germany to provide advance genetic diagnostics tests that help in prevention and management of cancers and blood disorders.In all these diagnostic tests, the Medical team of the applicant is involved in the complete cycle of testing process beginning with patient counselling to sharing the results and post-test counselling. Thus, the applicant is involved in diagnosis, pre- and post-counselling, therapy and prevention of diseases by providing tests that are sophisticated and relevant.||Whether services provided by them are covered under health care services and hence nil rated supply.||In the instant case the applicant offers services / facilities requiring diagnosis such as patient counselling, suggesting the relevant test for the patient, collecting samples, obtaining the result of the test, sharing the test results and post counselling. The medical team of the applicant discusses with the oncologist / pathologist, takes samples of required tissues and send it for the tests to US/Germany, with regard to the oncology / auto immune deceases. They play the role of referral / physician and also advice doctors for line of treatment to the establishment. They provide the said services in “Allopathy” system of medicines, recognised in India. Therefore, they qualify to be a clinical establishment.
Applicant is involved in providing the services of diagnosis, pre & post counseling, therapy and prevention of diseases by providing tests that are sophisticated and relevant. The medical team of the applicant is involved in the complete cycle and hence they facilitate the diagnosis process and therefore the services provided by the applicant qualify to be health care services.
Case-2: J C Genetic India (P.) Ltd  104 taxmann.com 88 (AAR – MADHYA PRADESH):-21st January 2019
Held since applicant has failed to prove their own authority and recognition for testing and giving clear report/opinion of their own, which can only be done by a NABL accredited laboratory, the Applicant do not stand qualified to be covered under “healthcare services” and “clinical Establishment”.
|The Applicant is a Healthcare company, engaged in the diagnosis pre and post-counselling therapy and prevention of diseases by providing necessary sophisticated tests. Further, the Applicant also provides genomic information which helps physicians and wellness professionals in curing diseases and improving human health.
The Applicant have collaboration with diagnostic Companies, accredited by NABL (National Accreditation Board for Testing and Calibration Laboratories) and DSIR (Department of Scientific and Industrial Research) certified to provide advance genetic tests that help in prevention and management of Cancer and various health & metabolic disorders.
|Whether services provided by the applicant fall under health care services and whether applicant qualifies to be a “Clinical Establishment” under clause 2(s) of the said Notification.?||Applicant admittedly have a collaboration with diagnostic companies accredited by NABL and DSIR.
Applicant has neither come forward with the names of such companies with which the Applicant claims to have collaboration, nor have the Applicant produced any document evidencing their own status of accreditation by NABL, which obviously is the sole accreditation body for testing and calibration laboratories.
Further such accreditation itself indicates that Applicant do not have their own authority for giving clear report/opinion of their own for the tests, and they have to get all the tests conducted and certified by the said NABL accredited laboratory. To put it in precise words, the Applicant are functioning as sub-contractors to the said accredited companies and not as an independent Clinical Establishment.
Applicant has failed to prove their own authority and recognition for testing and giving clear report/opinion of their own, which can only be done by a NABL accredited laboratory
It is pertinent to mention here that the exemption for which the instant Application has been filed is Service Specific as well as Service Provider Specific. Thus to qualify for the said exemption an establishment has to satisfy dual conditions of providing Healthcare Service as well as being a Clinical Establishment. Thus while the service provided by the Applicant may be Healthcare Service, they do not qualify to be a Clinical Establishment as observed supra.
We therefore observe that the Applicant has failed to prove their legal status as Clinical Establishment and they are merely working as ancillary or sub-contractors to other accredited companies, and accordingly the Applicant are not entitled to avail exemption under Notification No.l2/2017-CT(Rate) and corresponding notification issued under MPGST Act. We hold accordingly.
Case-3: M/s. Medivision Scan and Diagnostic Research Centre P. Ltd. (GST AAR Kerala)-Dated 12th April 2019-
Held diagnosis or investigations come under the category of health care services and are, therefore, eligible for exemption from GST.
|M/s. Medivision Scan and Diagnostic Research Centre Pvt. Ltd. is a clinical establishment engaged purely in diagnostic sentinels such as clinical biochemistry, micro biology, chemotology, clinical pathology, radiology, ECG, radiometry, pulmonary function test etc. They are coming under the purview of Clinical Establishment Act and are rendedng services through qualified laboratory technicians, paramedical technicians, doctors and radiologist.||(i) Whether diagnostic service provider has to take registration under GST.
(ii) Whether the applicant is exempt from GST considering the exemption provided in the Notification No.12/2017-CT (Rate) dtd.28-06-2017.
|In the instant cake the applicant offers services such as medical diagnositc tests to facilitate diagnosis process and, therefore, the services provided by the applicant qualify as health care services.
The diagnostic centres am organized facilities to provide diagnostic procedures such as radiological investigation supervised by a radiologist and clinical laboratory services by laboratory specialists usually performed through referrals from physicians and other health care facilities. Clinical / Medical diagnostic laboratory means a laboratory with one or more of the following; where microbiological, serological, chemical, hematological, immune-hematological, immunological, toxicological, cytogenetic, exfoliative cytogenetic, histological, pathological or other examinations are performed of materials / fluids derived from the human body for the purpose of providing information on diagnosis, prognosis, prevention, or treatment of disease. These types of diagnosis or investigations rightly come under the category of health care services and are, therefore, eligible for exemption from GST.
As per SRO.No.371/2017 vide sl.no.74 (Notification No.12/2017-CT (Rate) dtd. 26-06-2017, services y way of diagnosis come under the category of health care services covered under SAC 9993 in connection with health care services provided by a clinical establishment and are, therefore, exempted.
By virtue of Section 23 of State Goods and Services Tax Act, any person engaged exclusively in the business of supplying goods or services or both, that are.not liable to tax or wholly exempt from tax under GST Act, are not liable to take registration. However, such persons are liable to obtain registration if they are receiving any goods or services liable to tax under reverse charge as per notifications issued under Section 9(3) of the State Goods and Services Tax Act.