The AAR ruled that the supply of food by the petitioner constitutes a standalone service outsourced by the hospital and is not directly associated with providing healthcare services.
In a significant ruling, the West Bengal Authority for Advance Ruling (AAR) has clarified that the standalone supply of food to in-patients by catering contractors does not qualify for Goods and Services Tax (GST) exemption. This decision arises from the case involving Bamapada Jana, a service provider contracted by the Central Hospital, South Eastern Railway, for meal delivery services to in-patients.
Petitioner’s Argument for Tax Exemption
The petitioner contended that their catering services formed part of the hospital’s composite healthcare services and should be exempt under Notification No. 12/2017-Central Tax (Rate). This notification grants tax exemptions to healthcare services provided by clinical establishments, authorized medical practitioners, or paramedics.
Also Read: GST on Health Care Services -Advance Ruling in Case of Baroda Medicare
AAR’s Distinction Between Healthcare and Catering Services
However, the AAR ruled that the supply of food by the petitioner constitutes a standalone service outsourced by the hospital and is not directly associated with providing healthcare services. The AAR emphasized that healthcare services encompass food provided to in-patients when it is an integral part of the treatment, prepared by the hospital’s in-house kitchen or staff.
The AAR bench, comprising Dr. Tanisha Dutta and Joyjit Banik, highlighted that the petitioner’s role was limited to preparing and delivering food based on dietary instructions provided by the hospital. Consequently, these activities do not fall under the definition of “healthcare services” under the GST Act.
Reference to Circular No. 32/06/2018-GST
The ruling referenced Circular No. 32/06/2018-GST, which specifies that when hospitals outsource food services to external contractors, GST is applicable on such supplies. Moreover, hospitals cannot claim Input Tax Credit (ITC) on these outsourced food services.
Also Read: Delhi High Court Ruling: Electricity Commissions Fees Exempted from GST
Differentiation from Previous Rulings
The AAR distinguished this case from previous rulings involving multi-specialty hospitals, where food supply was considered ancillary to healthcare services. In the present case, the applicant operates as a caterer and is not involved in delivering healthcare services.
Conclusion
The West Bengal AAR concluded that the petitioner must charge GST on invoices issued to the hospital since these services do not fall within the scope of composite healthcare services.
Case Details
- Case Title: Bamapada Jana
- GSTIN: 19AFGPJ5685M1ZP
- Case Number: WBAAR 16 of 2024
- Date: 26.11.2024
- Applicant: Smt. Swati Mukherjee
This ruling reiterates the distinction between healthcare services and outsourced catering services under GST law, reinforcing that GST liability applies to contractors supplying food independently of hospital-provided healthcare.
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