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MCQ Self Challenge # 0074 on Applicability of GST in case of Ambulance Services

Applicability of GST in case of Ambulance Services

 

Dear Professional Seniors & Friends,
Warm Greeting!

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

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

A) GST is applicable since government is paying consideration to PSP’s.
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 PSP’s to government?

A) GST is applicable since government is paying consideration to PSP’s.
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.

Sincere Regards

CA Sanjay Kumar Agrawal
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Answer MCQ Self Challenge # 0074

 

Dear Professional Seniors & Friends,

Warm Greetings!

 

This post of MCQ is on amendment on provisions in GST act which is giving effect to the changes in rate of tax in 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& 74.2:-

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

Taxability of First Leg

  • Services provided without any consideration shall be out of purview of GST since it is not a supply as per Section 7 of CGST Act.
  • Moreover Services provided by Government and PSPs by way of transportation of patients in an ambulance is 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, Central Government has issued Circular no. 51/25/2018- GST dated 31st July,2018 which is in line with the 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 –
  1. No. 3 of notification no. 12/2017- Central Tax (Rate ) dated 28.06.2017 if it is a pure service and not a composite supply involving supply of any goods , and
  2. No. 3A of notification no. 12/2017 – Central Tax ( Rate dated 28.06.2017 if 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 above provides 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 municipality under article 243W of the constitution.
  • Functions of Health and sanitation is entrusted to Panchayats under Article 243G of the constitution of India read with Eleventh Schedule. Function of Public Health is entrusted to Municipalities under Article 243W of 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 243G and 243W of the constitution and hence exempted under S.No. 3/3A of Notfication 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 74.2 : A) GST is not applicable since it is exempted from GST vide Serial No.3/3A of N.No. 12/2017 CGST.

 

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

 

Sincere Regards!

CA Sanjay Kumar Agrawal

Mobile: 9810116321 Whatsapp: 8799772245

 

To access MCQ posts regularly, please Join Telegram Channel:
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