An Appellate Authority of Advance Ruling (AAAR) has said health check-ups of employees done by companies and conducted by doctors and nurses should be regarded as a medical service and should not invite any goods and services tax (GST), providing benefits to many entities and even organisations that forge an alliance or rope in hospitals and doctors for routine check-ups within or outside hospital premises.
In a significant decision, the AAAR altered an earlier ruling by the Gujarat Authority for Advance Ruling (AAR) that had said 18 per cent GST would be applicable on such health services.
“We modify the ruling … and hold that the supply of occupational health check-up services by the hospital, i.e., nursing staff, doctors and paramedical staff on the hospital’s payroll working in different corporates for providing health check-up services, ambulance facilities and allied medical services to their employees and also the camps conducted for health check-up outside the hospitals, to be treated as healthcare services and exempted under GST,” ET quoted the Gujarat AAAR ruling.
The ruling, which came out in a case filed by Vadodara-based Sunshine Global Hospital, also said GST should not be charged even if these check-ups were precautionary.
Harpreet Singh, partner at KPMG India, told the business daily: “This ruling has rightly held that annual employee health check-up is exempt from GST, as even if the checkup is a precautionary measure and not linked to any ailment, the essence of the transaction continues to be healthcare service and hence, there should not be any narrow interpretation to deny the GST exemption benefit.”
At present, the healthcare services in India are exempt from GST. Plus, the tax officials have faced off with some other institutes that claim to provide wellness services.
However, physiotherapy, naturopathy, Ayurveda, yoga and meditation provided by certain wellness resorts are taxable at 18 per cent GST.
Worth mentioning here that in many cases, the purpose of GST is treated similar to a resort or a hotel. The regimented vacation is treated at par with a hotel or resort stay and about an 18 per cent tax (it would depend on the room tariff) would be payable by most on their final bills.
