Lease Rent paid by Hospital on Premises subject to GST: AAR [Read Order]

The Karnataka Advance Ruling Authority (AAR) recently held that the Goods and Services Tax (GST) is leviable on the rent paid / payable for premises, taken on lease by a Hospital.

The applicant, a cardiology specialist hospital running on a premise taken the lease. They are providing cardiology related, life-saving, health care services to the patients and the said output services are exempt from GST. They have taken premises of one floor on rental basis from existing building of Mallige Hospital for heart Care Services only.

The only question before the authority was regarding the applicability of tax on the rent payable by the hospital, catering life-saving services under the GST regime.

Before the Authority, the appellant argued that under the old service tax regime, the rent on the room service provided to the heart care patients undergoing treatment was exempted from tax.

It was noted that the applicant taken the premises on lease and running exclusive heart care center & providing health care services on a commercial basis.

“The impugned service of Rental or leasing services involving own or leased non-residential property is classified under the heading (SAC) 997212 and is taxable under GST. Further, no specific exemption is available under any notification for the time being in force for the said service. Also, there is no provision available in the Act which allows the exemption on an input service if the output service provided by the taxable person is exempt.”