What is applicability of GST on GP's fees paid by a hospital?

What is the applicability of goods and services tax (GST) on the general practitioner’s  (GP’s) fees paid by a hospital? The fee is given to a GP who recommends the patient to the hospital but does not provide any treatment. These fees are booked in the system as doctor fees/payments. Are hospitals liable to pay GST? 

Based on your query, it appears that the services provided by the doctor are not health care services.  The consideration paid by the hospital to the doctor appears more to be in the nature of a commission for referring of patients to the hospital. Thus, such services should be liable to GST at the rate of 18 per cent. If the doctor is not registered under GST, the liability to pay GST and undertake related compliances should be on the hospital.

Please suggest the applicability of GST in the case of patients who do not pay directly to the hospital but an insurance company (from which the patient has taken medical insurance) makes the payment to the hospital.

Your query relates to taxability of services provided by a hospital to patients who choose to pay the hospital by making a claim with an insurance company. Services by way of diagnosis or treatment or care for illness by hospitals are exempt from GST. Even when the payment may be made by the insurance company on behalf of the patient, such services provided by the hospital should continue to be exempt.  

I have a commercial immovable office space in Delhi and the annual rent is less than Rs 20 lakh. I was registered under service tax, and have now migrated to GST. I am based in Amritsar and registered in Punjab for GST. Do I require registration under GST? If so, in which state should I get myself registered? I am not doing any other business under the same PAN. 

A person having annual aggregate turnover of less than Rs 20 lakh on an all-India basis is not required to obtain GST registration.  Therefore, if your turnover is less, you can surrender the registration. However, it would be relevant to note if you render interstate services, this threshold is not applicable and you are mandatorily required to be registered under GST. 

In lease of immovable property, the government tweet has clarified that registration be required only in the state from where the services are supplied.  We understand you are based out of Punjab and do not have any presence in Delhi.  Therefore, you are not required to obtain registration in Delhi. If you render services from Punjab in respect of immovable property located in Delhi, you should be mandatorily registered in Punjab, as the transaction should qualify as interstate supplies.

I had purchased shoes from a showroom in Bengaluru after GST was introduced. The offer was to buy two and get one free. The shop did not charge 18 per cent GST on the two products but charged it on the free shoe on which the offer was given. Is it true that free offer items carry a GST? Will the GST not apply on the items not on offer? Does the GST application differ from store to store?

Generally, GST is only applicable on the supply of goods/services for a consideration. It is not applicable on goods/services supplied free. Therefore, based on your query, the shopkeeper should have charged applicable GST only on the shoe pairs for which consideration was paid. The shopkeeper should not have charged GST on the pair supplied free of cost. Currently, GST provisions applicable all over India are identical. Therefore, GST implications should not differ from state to state.

What is the impact of GST on a trust registered under section 12AA of the Income Tax Act 1961? 

The exemption provided under the Service tax law for charitable services rendered by a trust registered under section 12AA of the Income Tax Act, 1961 has been carried forward under the GST law as well. Thus, such service provided by such Trust should continue to be exempt under GST law also. 
 

The writer is tax partner, PwC India. Aditya Khanna, associate director, PwC contributed to this column. The views expressed are experts’ own. Send your queries to yourmoney@bsmail.in