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The supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of composite supply of health care treatment and hence not separately taxable. The supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients is taxable.

Shanti Prime Publication Pvt. Ltd.

Levy of GST—The applicant is rendering medical services with professionals like doctors, nursing staff, lab technicians etc. In GST scenario health care services by a clinical establishment, an authorized medical practitioner or para medicals have been exempted vide classification 9993. Medicines supplied through pharmacy to both inpatients and outpatients under the prescription of the doctors are incidental to the health care services rendered in the hospital and beyond the ambit of taxation. Hence the petitioner sought for an advance ruling on the liability of hospital under GST Act on the supply of medicines and allied items through the pharmacy.
Held that :-
i) The supply of medicines and allied items provided by the hospital through the pharmacy to the in-patients is part of composite supply of health care treatment and hence not separately taxable.
ii) The supply of medicines and allied items provided by the hospital through the pharmacy to the out-patients is taxable [2018] 4 TAXLOK.COM 017 (AAR-Kerala)