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5% GST applicable on Food supplied to Hospital on outsourcing basis: AAR

  • | Divita S Gupta

5% GST applicable on Food supplied to Hospital on outsourcing basis: AAR

The Telangana bench of the Authority of Advance Ruling has held that a GST rate of 5% is applicable to food supplied to hospitals. These hospitals include Government Hospitals, Private Hospitals, and Autonomous Bodies on outsourcing basis, with the condition of non-availability of ITC. The applicant is involved in the business of supplying food to an autonomous hospital body and sought an advance ruling to clarify whether GST is applicable on food that is supplied to hospitals. Additionally, if it is applicable, then what should be the tax rate. Furthermore, if GST is not applicable, will the GST already paid by hospitals and remitted to the Government be recoverable in the future bills. 

The Telangana AAR held that a GST of 5% is chargeable on food supplied to hospitals. The AAR observed, “The supply of food to hospitals by the applicant depends on the time period (during which they are supplied) and will be subjected to tax as per the provisions of Notification No. 11/2017 – State Tax (Rate), issued in G.O.Ms No. 110, Revenue (CT-II) Department, Dated. 29-06-2017 amended from time to time

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Avalara Author
Divita S Gupta
Avalara Author Divita S Gupta
Divita has served as a writer and editor for top financial services organizations in India. She has written on topics like mutual funds, insurance, taxes, SME financing for globally recognized banking and financial organizations including ICICI, Aditya Birla Group, News Corp. With a Masters in Business Administration from Symbiosis International University, she currently owns a small business in Mumbai.

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