Itc on capital goods in case of a hospital

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KAVUNGA PARAMBIL SAREENA (Querist)
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23 April 2018 What is the procedure for claiming input tax credit on purchase of fixed assets for a hospital cum pharmacy(including gst paid on contract work of hospital construction)?
Can we set off the output tax liability on medicine sales of pharmacy run by hospital with the the input tax paid on purchase of fixed assets(building,air conditioner,lift,etc..)?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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23 April 2018 No you cannot set off GST Of capital goods with pharmacy, health services provided by a hospital are exempt, the GST the hospital pays to its vendors (i.e., manpower suppliers or pharmaceutical suppliers) would not be credited to the hospital. This follows the simple principle that credit is allowed on inputs only if tax is charged on the output.

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KAVUNGA PARAMBIL SAREENA

KAVUNGA PARAMBIL SAREENA (Querist)
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24 April 2018 Sir, both the hospital and pharmacy is under the same gstin registration.So, can the input tax credit on fixed assets be claimed proportionately for taxable medicine sales of the pharmacy?

KAVIRAJA ADDANGADI

KAVIRAJA ADDANGADI (Expert)
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24 April 2018 Reply is very clear This follows the simple principle that credit is allowed on inputs only if tax is charged on the output. You are not charging any outputs on patient services, you can not adjust output GST On pharmacy from other hospital input service, Even though GSTIN are same since one is exempted services and another is taxable. You cannot avail ITC of hospital.

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