GST on Ambulance Services
GST on Ambulance Services
As a move towards better health care system in the country, the Government of India under National Health Mission provides free ambulance service to States. Free ambulance service is based on two model Dial 108 and Dial 102 services.
Dial 108 is Emergency Response System, wherein, patients of critical care, trauma and accident victims are attended, whereas, Dial 102 is for Patient Transport System and covers transport of basic patients like pregnant ladies and children.
The service of providing free of cost ambulance service, as detailed above, are generally outsourced by the State Governments. With this regard, under the earlier law, the Ministry of Health & Family Welfare demanded the clarification regarding the applicability of service tax on service provided by the private service providers to the State Government.
The clarification of taxation under erstwhile law was provided vide circular no. 210/2/2018- Service Tax dated 30th May, 2018. It must be noted that circular no. 210/2/2018- Service tax clarifies on the exemption provided at sl. no. 2 and sl. No. 25(a) of notification no. 25/2012- Service tax dated 20th June, 2012. According to the said circular, the taxability of ambulance service was clarified as under –
Services provided by the Government for the public
In case consideration is not charged –
When free ambulance service is provided by the government, no fee is collected for the same and hence any activity that is carried out without any consideration is out of the purview of the scope of ‘service’ as provided under section 65(44) B of the Finance Act, 1994 and hence no tax is payable.
In case consideration is charged –
In extreme case, even if the consideration is charged by the government, as per provisions of notification no. 25/2012- Service Tax dated 20th June, 2012, entry no. 2(ii), services provided by way of transportation of a patient in an ambulance, other than health care services by an clinical establishment, an authorized medical practitioner or paramedics are exempt from whole of the service tax.
Services provided by the private service provider for the public
In case consideration is not charged –
When free ambulance service is provided by the government, no fee is collected for the same and hence any activity that is carried out without any consideration is out of the purview of the scope of ‘service’ as provided under section 65(44) B of the Finance Act, 1994 and hence no tax is payable.
In case consideration is charged –
In extreme case, even if the consideration is charged by the government, as per provisions of notification no. 25/2012- Service Tax dated 20th June, 2012, entry no. 2(ii), services provided by way of transportation of a patient in an ambulance, other than health care services by an clinical establishment, an authorized medical practitioner or paramedics are exempt from whole of the service tax.
Services provided by the private service provider for the Government
In case consideration is not charged –
When free ambulance service is provided by the private service provider to the government and no fee is collected for the same. Since the said activity is carried out without any consideration the same is out of the purview of the scope of ‘service’ as provided under section 65(44) B of the Finance Act, 1994 and hence no tax is payable.
In case consideration is charged –
As per provisions contained in notification no. 25/2012- Service Tax dated 20th June, 2012, sr. no. 25(a), services provided to the Government, a local authority or a governmental authority, by way of public health is exempt from payment of service tax. Service of dial 108 and dial 102 are essential requirement of the public hospital and hence the said services are exempted from payment of service tax as per provisions contained in notification no. 25/2012- Service tax dated 20th June, 2012.
Goods and Service Tax has been made effective from 1 st July, 2017 and in order to provide above exemption, the provisions similar to erstwhile sl. no. 2 of notification 25/2012- Service tax dated 20th June, 2012 are contained in sl. no. 74 of notification no. 12/2017- Central Tax (Rate) dated 28th June, 2017.
Further, the provisions similar to erstwhile sl. No. 25(a) of notification 25/2012- Service tax dated 20th June, 2012, substantially though not in the same form are contained in sl. no. 3 and 3A of notification no. 12/2017- Central Tax (Rate) dated June, 2017.
Government has come up with a clarification vide circular no. 51/25/2018- GST dated 31st July, 2018 as corresponding to erstwhile clarification vide circular no. 210/2/2018- Service Tax dated 30th May, 2018 and the present clarification is explained hereunder –
| Sr. No. | Particulars | Position under GST | Explanation |
| 1 | Services provided by the Government for the public. | Services exempted | As explained above, the position remains the same as clarified in circular no. 210/2/2018- Service Tax and the services are exempted vide sl. No. 74 of notification no. 12/2017- Central Tax (Rate) dated 28th June, 2017 |
| 2 | Services provided by the private service provider for the public. | Services exempted | As explained above, position remains the same as clarified in circular no. 210/2/2018- Service Tax and the services are exempted vide sl. No. 74 of notification no. 12/2017- Central Tax (Rate) dated 28th June, 2017 |
| 3 | Services provided by the private service provider for the Government | Services exempt fully in case of no consideration and services exempted conditionally in case of consideration. |
As explained above, in case services are provided without consideration i.e. no consideration, GST is exempt. In case services are provided with consideration and the said services are classified as pure service, no GST is payable as per sl. No. 3 of notification no. 12/2017. In case services are provided with consideration and services are classified as composite supply of goods and services and value of supply of goods constitutes not more than 25 % of the value of composite supply then no GST is payable. |