Circular No. 51/25/2018-GST
F. No. 354/220/2018-TRU
Government of India
Ministry of Finance
Department of Revenue
Tax research Unit
3 2 ao
Room No. 146, North Block,
New Delhi, 31° July, 2018
To,
The Principal Chief Commissioners/ Chief Commissioners/ Principal Commissioners/
Commissioner of Central Tax (All) /
The Principal Director Generals/ Director Generals (AI)
Madam/Sir,
Subject: Applicability of GST on ambulance services provided to Government by
private service providers under the National Health Mission (NHM) — Reg.
I am directed to invite your attention to the Circular No. 210/2/2018- Service Tax,
dated 30" May, 2018. The said Circular has been issued in the context of service tax
exemption contained in notification No. 25/2012- Service Tax dated 20.06.2012 at SI. No. 2
and 25(a). The Circular states, inter alia, that the service of transportation in ambulance
provided by State Governments and private service providers (PSPs) to patients are exempt
under notification No. 25/2012- Service Tax dated 20.06.2012 and that ambulance service
provided by PSPs to State Governments under National Health Mission is a service provided
to Government by way of public health and hence exempted under notification No. 25/2012-
Service Tax dated 20.06.2012.
2.
The service tax exemption at SI. No.2 of notification No. 25/2012 dated 20.06.2012
has been carried forward under GST in the identical form vide Sl. No. 74 of notification No.
12/2017- CT (R) dated 28.06.2017. The service tax exemption
at serial No. 25(a) of
notification No. 25/2012 dated 20.06.2012 has also been substantially, although not in the
same form, continued under GST vide SI. No. 3 and 3A of the notification No. 12/2017- CT
(R) dated 28.06.2017. The said exemption entries under Service Tax and GST notification
read as under.
Service Tax
GST
SI. No. 2:
Sl. No. 74:
(i)
Health
care
services
by
a
clinical | Services by way of-
establishment,
an
authorized
medical | (a)
health
care
services
by
a
clinical
practitioner or para-medics;
establishment,
an
authorized
medical
(ii)
Services
provided
by
way
of | practitioner or para-medics;
transportation of a patient in an ambulance, | (b)
services
provided
by
way
of
other than those specified in (1) above.
transportation of a patient in an ambulance,
other than those specified in (a) above.
Circular No. 51/25/2018-GST
SL No. 25(a):
Services provided to Government, a local
authority
or
a governmental authority by
way
of
water
supply,
public
health,
sanitation
conservancy,
solid
waste
management
or
slum
improvement
and
upgradation
Sl. No. 3:
Pure
services (excluding works
contract
service
or
other
composite
supplies
involving supply of any goods) provided to
the Central Government, State Government
or Union territory or local authority or a
Governmental authority or
a Government
Entity by way of any activity in relation to
any function entrusted to a Panchayat under
article
243G
of
the
Constitution
or
in
relation
to
any
function
entrusted
to
a
Municipality under
article 243W
of the
Constitution.
Sl. No. 3A:
Composite supply of goods and services in
which
the
value
of
supply
of
goods
constitutes not more than 25 per cent. of the
value of the said composite supply provided
to
the
Central
Government,
State
Government
or Union
territory
or
local
authority or a Governmental authority or a
Government Entity by way of any activity in
relation
to
any
function
entrusted
to
a
Panchayat
under
article
243G
of
the
Constitution or in relation to any function
entrusted
to
a Municipality under article
243W of the Constitution.
3.
Functions of ‘Health and sanitation’ is entrusted to Panchayats under Article 243G of
the Constitution of India read with Eleventh Schedule. Function of ‘Public health’ is entrusted
to Municipalities under Article 243W of the Constitution read with Twelfth schedule to the
Constitution. Thus ambulance services are an activity in relation to the functions entrusted to
Panchayats and Municipalities under Articles 243G and 243 W of the Constitution.
4.
In view of the above, it is clarified that the clarification contained in the Circular No.
210/2/2018- Service Tax dated 30" May, 2018 with regard to the services provided by
Government and PSPs by way of transportation of patients in an ambulance is applicable for
the purpose of GST also, as the said services are specifically exempt under notification No.
12/2017- Central Tax (Rate) dated 28.06.2017 vide Sl. No. 74.
Circular No. 51/25/2018-GST
5,
As regards the service provided by PSPs to the State Governments by way of
transportation of patients on behalf of the State Governments against consideration in the form
of fee or otherwise charged from the State Government, it is clarified that the same would be
exempt under-
a.
Sl. No. 3 of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a
pure service and not a composite supply involving supply of any goods, and
b.
Sl. No. 3A of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if itis a
composite supply of goods and services in which the value of supply of goods
constitutes not more than 25 per cent of the value of the said composite supply.
6.
Difficulty if any, in the implementation of this circular may be brought to the notice
of the Board.
Yours Faithfully,
SS) asqor”
Susanta Mishri
Technical Officer (TRU)
Email:susanta.mishra87@gov.in
Tel: 011-23095558
Enclosure:
Circular No. 210/2/2018- Service Tax (F. No. 137/51/2016- Service Tax, dated 30" May,
2018)
Circular 210 /2 /2018-Service Tax
F. No 137/51/2016 Service Tax
Government of India
Ministry of Finance
Department of Revenue
Central Board of Indirect Taxes and Customs
Service Tax Wing
wk
New Delhi, the 30th May, 2018
To,
All Principal Chief /Chief Commissioners of Central Excise and GST
All Principal Directors General/ Directors General / Chief Commissioner AR CESTAT
All Principal Commissioners/Commissioners of Central Excise
& GST/AR CESTAT
All Principal Additional Directors General/ Additional Directors General
Madam/Sir,
Subject: Applicability of service tax on ambulance services provided to government
by private service providers under the National Health Mission(NHM)
I am directed to draw your attention to a reterence of the Ministry of Health & Family
Welfare, Government of India on the above subject and analyse the manner in which the taxability
has to be determined in such cases.
2.
It has been stated that under the National Health Mission(NHM), a flagship programme
of the Government of India, the Central Government provides technical and financial support to
states to strengthen healthcare systems including for free ambulance services (Dial 102/108
services). Dial 108 is the emergency response system primarily designed to attend to patients of
critical care, trauma and accident victims etc., while Dial 102 services essentially are for basic
patient transport aimed to cater the needs of pregnant women and children, though other categories
are also taking benefit and are not excluded. Many states are operating the ambulance service on
an outsourced model and these services are funded under the NHM and provided free of cost to all
patients. In this connection the Ministry of Health & Family Welfare, has requested for a
clarification whether the private service provider(PSP) is liable for payment of service tax.
3.1
The matter has been examined. It is observed that this entire project involves three legs of
activities, one by the Government for the public, second by the PSP for the public and third, by
the PSP for the Government. In respect of the first and the second legs of activity i.e. the ambulance
services being provided by the Government and PSP to the patients, neither the State government
nor the PSP charges any fee from the patients who avail of these ambulance services. The PSP
however charges a fee from the State government for carrying out the third activity.
3.2
Any activity carried out by one person for another without any consideration will not be
covered by the definition of ‘service’ in section 65(44) B of the Finance Act, 1994. Even if a
consideration was charged, by virtue of entry 2(ii) of notification no 25/2012- Service Tax dated
20th June, 2012, services provided by way of transportation of a patient in an ambulance, other
than health care services by a clinical establishment, an authorized medical practitioner or para-
medics, are exempted from the whole of the service tax leviable thereon. Thus the activities
provided by the State government and the PSP to patients are not leviable to service tax.
‘i
