The Karnataka Authority for Advance Rulings held that supply of database service to AllMS is not covered under Goods and Service Tax ( GST ) exemption under Notification. The applicant is seeking the rate of tax/ exemption on the supplies under Clinical Key subscription product supplied to specified customers ( educational institutions ). It was observed that the customer, with the Clinical Key’ subscription, gets online access to a medical centric database with a search facility and no human intervention is available.
M/S. Elsevier BV, the Applicant is a company incorporated under the laws of the Netherlands, having their registered office at Radarweg 29, 1043 NX Amsterdam, the Netherlands, 226016.
In India, the Applicant is registered under the Central Goods and Services Tax Act, 2017 (‘the CGST Act’) read with Integrated Goods and Services Tax Act, 2017 (‘the IGST Act’) in the State of Karnataka, for providing the services under the category of online information and database access or retrieval ( OIDAR ) services.
The applicant engaged in the business of providing online content such as educational periodicals, online journals, online books and online newspapers, videos to various educational institutions, corporates and individuals and also supplies services i.e., different products (namely Clinical Key, SSRN, JC01 etc.) to different types of customers. The applicant is seeking the rate of tax/ exemption on the supplies under Clinical Key subscription product supplied to specified customers ( educational institutions ).
The Applicant submitted that they offer one of the services under the name ‘Clinical Key’ (‘the product’), which is an online subscription based clinical database with search and navigate facility that helps doctors, nurses and other healthcare professionals make better decisions anywhere, anytime, in any patient scenario; Clinical Key is accessible through internet from the website “www.clinicalkey.com”; the user interface page of the website is a search engine offers a compilation of resources such as full-text reference books and journals, synoptic content, drug information, videos, practice guidelines, customized patient education handouts, clinical calculators etc.
The applicant with regard to the issue of whether the supply of database services on subscription basis is exempt from GST under S. No. 69 (b) (v) of the exemption notification.
It was stated that in the case of a Clinical Key subscription, the customers get online access to medical centric database with a search facility, with the content entirely supplied in electronic form. There is no human intervention from the Applicant’s side given the user can himself navigate through the content and access whatever is available in the subscribed database.
Clinical Key is a compilation of resources such as fulltext reference books and journals, synoptic content, drug information, videos, practice guidelines, customized patient education handouts, clinical calculators etc.
The customers of the product ‘Clinical Key’ are individuals or institutional customers, who are generally healthcare executives, clinicians, nurses, medical librarians and medical students. Individual customers subscribe online through the website. Institutional customers such as hospitals, educational institutions etc., who are registered or unregistered under GST, subscribe annually for a specific number of authorized users.
The AAR bench comprising Dr. M.P. Ravi Prasad and Kiran Reddy T observed that the customer, with the Clinical Key’ subscription, gets online access to a medical centric database with a search facility. The website also has a browser facility for navigation of the content that is supplied in electronic form. There is no human intervention from the applicant’s side as the user himself navigates through the contents and access whatever that is available in the subscribed database.
The Authority held that the supply of services by the applicant to AllMS is not covered under exemption in terms of Entry No. 69(b)(v) of the Notification No. 9/2017-1T(Rate) dtd 28.6.2017 as amended.
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