Block ITC in respect of health services- An overview of Section 17(5(b)(i) of the CGST Act, 2017

 

What does the expression “health services” imply in the context ???

Clause (zg) of Notification No. 12/2017 – Central Tax (Rate) defines “health care services” as any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma.

The expression used in section 17(5)(b)(i) is “health services” and not “health care services.” Hence the definition of “health care services” cannot be applied mutatis mutandis.

“Health services” are not defined under the GST law.

The clause reads as under:-

ITC shall not be available in respect of:-

(b) The following supply of goods or services or both

(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery………..

Health services have not been defined but are sandwiched between “beauty treatment” and “cosmetic and plastic surgery”.

Applying the rule of “Noscitur a sociis” this indicates that health services referred to in the clause are elective services similar to beauty treatment, cosmetic and plastic surgery and do not refer to mainstream medical services.

Noscitur a sociis is a rule of construction implying that the meaning of an unclear or an ambiguous word (as in a statute or contract) should be determined by considering the words with which it is associated in the context i.e., by reference to other words in the context of which they appear.