Know About The Applicability Of GST In Case Of Ambulance Services

MCQ SELF CHALLENGE # 0074 ON APPLICABILITY OF GST IN CASE OF AMBULANCE SERVICES

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Here is the Next post of #MCQ on concept-based practical professional knowledge on the applicability of GST in case of ambulance services in a unique manner to be self-answered by participants. The detailed answers to these MCQs shall be posted by our tax consultant in Gurgaon the next day for the self-assessment of the participants.

MCQ 74.1: Government of India started a free ambulance service to patients with the help of private service providers (PSP's) PSP's will charge RS 500 per trip to the government. Which among the following is correct in relation to GST applicability on services provided by the government to patients?

A) GST is applicable since the government is paying consideration to PSPs.

B) GST is not applicable since there is no consideration involved in it.

C) GST is not applicable since it is exempted from GST.

D) Both B and C.

MCQ 74.2: Which among the following is correct in relation to GST applicability on services provided by PSPs to the government?

A) GST is applicable since the government is paying consideration to PSPs.

B) GST is not applicable since there is no consideration involved in it.

C) GST is not applicable since it is exempted from GST.

D) Both C and D.

Answer MCQ Self Challenge # 0074

This post of MCQ is on the amendment on provisions in the GST act which is having an effect on the changes in the rate of tax in the case of outdoor catering services

Answer to MCQ 74.1:

Both B and C.

Answer to MCQ 74.2:

A) GST is not applicable since it is exempted from GST.

Practical Analysis for MCQ 74.1 And 74.2

• In case a service is provided by PSP to patients on behalf of the government then it involves two legs of activities, one by the Government for the public and second by PSP for the Government

Taxability of First Leg

• Services provided without any consideration shall be out of the purview of GST since it is not a supply as per Section 7 of the CGST Act
• Moreover Services provided by the Government and PSPs by way of transportation of patients in an ambulance are exempt from GST vide Sl.
  No. 74 of Notification No. 12/2017-CT dated 28th June, 2017

Taxability of Second Leg

• In order to clarify the applicability of GST in the second leg of activity: the Central Government has issued Circular no 51/25/2018 GST dated 31st July 2018 which is in line with Circular No: 210/2/2018-Service Tax
• The circular has clarified that the services provided by private service providers to the State Government by way of transportation of patients on behalf of the State Government against consideration in the form of fee or otherwise charged from the State Government is exempt under -

28. No. 3 of notification no. 12/2017- Central Tax (Rate) dated 28 06:2017 it is a pure service and not a composite supply involving supply

of any goods, and

29. No. 34 of notification no, 12/2017-Central Tax (Rate dated 28.06.2017 # it is a composite supply of goods and services in which the value of supply of goods constitutes not more than 25% of the value of the said composite supply.

• Both the above entries provide for exemption in case of services provided to CG SG UT, Governmental authority, or government or any other local authority 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
• Functions of Health and sanitation are entrusted to Panchayats under Article 2430 of the constitution of India read with Eleventh Schedule Function of Public Health is entrusted to Municipalities under Article 243W of the constitution of India read with Twelfth Schedule
• Thus ambulance services are an activity in relation to the functions entrusted to Panchayats and Municipalities under Articles 2430 and
  243W of the constitution and hence exempted under S. No: 3/3A of Notification No. 12/2017 of CGST.
  
• Based on the above analysis correct answer MCQ 74.1: D) Both B and C since there is no consideration involved in it and also it is exempted under S.No. 74 of N No. 12/2017 CGST
  
• Correct answer MCQ 742 A) GST is not applicable since it is exempted from GST vide Serial No.33A of N No 12/2017 CGST

(Disclaimer: The objective of the MCQ post is just to discuss the concept, it may happen by a change of facts, and the answer may be different. Please do not treat this as a professional opinion you can definitely have your own opinion.)

Sincere Regards

CA Sanjay Kumar Agrawal

Mobile: 9810116321 WhatsApp: 8799772245