1. Healthcare Services Retain Exemption Even When Provided Through Another Hospital
Facts: A hospital (H1) entered into a Medical Services Agreement (MSA) with another hospital (H2) to provide healthcare services to H2's patients. H2 collected the full consideration from patients and remitted 75% to H1. Tax authorities denied the GST exemption for healthcare services to H1, arguing that H1 was providing business support services to H2.
Ruling: The High Court held that H1 qualified as a clinical establishment providing healthcare services. The court emphasized that the classification of a service must be determined based on its substance rather than its form. Once the substance is healthcare, GST exemption applies regardless of the contractual or revenue-sharing arrangement. The court relied on Circular No. 32/06/2018-GST dated February 12, 2018, which allows GST exemption for services provided by doctors, whether employed or not.
*Case: Healthcare Global Enterprises Limited v. ACCT, 2026-VIL-541-KAR*
Relevance: This ruling correctly reiterates the "substance over form" principle. The same logic can be extended to other industries where exemptions or concessional rates apply to specified services but multiple taxpayers are contractually involved. The Supreme Court applied a similar analogy in State of Karnataka v. Taghar Vasudeva Ambrish (2026 (104) GSTL 193 SC), holding that since students ultimately use hostels as residential dwellings, the transaction between the property owner and the hostel is exempt. Under the erstwhile positive service tax regime, CBIC Circular No. 147/16/2011-ST dated October 21, 2011, extended exemption to sub-contractors in the construction industry even when they were not expressly exempted.
2. Overseas Group Company Acting as Central Procurement Hub Is Not an 'Intermediary'
Facts: An Indian company (IC) entered into an agreement with its overseas group company (OC) for support in procuring goods. OC acted as the central procurement hub for the entire group, with its scope of work including identification, selection, and approval of suppliers, negotiation of terms, and conclusion of contracts. IC paid GST under reverse charge treating it as an import of service, but subsequently sought a refund. Authorities rejected the refund, arguing that GST was correctly paid because OC did not qualify as an intermediary.
Ruling: The GST Appellate Tribunal (GSTAT) relied on Circular No. 159/15/2021-GST dated September 28, 2021, and previous rulings on the issue. It held that OC acted as a central procurement hub for the entire group, and its services were principal services, not ancillary. Accordingly, OC does not qualify as an intermediary, and IC is required to pay GST on such service as an import of service. The GSTAT also made two important observations:
CBIC circulars are not binding on GSTAT.
Refund is available even if the taxpayer claims it as an afterthought, as long as the conditions under Section 54 are satisfied.
*Case: Dow Chemical International Private Limited v. CST, 2026-VIL-26-GSTAT-DEL*
Correctness: This ruling correctly held that OC provided a complete procurement solution — from studying the market and purchase requirements to identifying suppliers and concluding contracts. This goes far beyond the activities of an intermediary (i.e., a broker or agent facilitating a supply between two persons).
3. GSTR-2A Matching Not Required for ITC on Import of Goods and SEZ Procurements
Facts: The petitioner claimed Input Tax Credit (ITC) on import of goods and SEZ procurements but incorrectly reported such ITC under the "All other ITC" column of GSTR-3B instead of the respective columns. Authorities denied the ITC due to non-reflection of invoices in GSTR-2A.
Ruling: The High Court noted that during the dispute period, GSTR-2A captured only details of ITC on domestic procurements. ITC on import of goods, import of services, or SEZ procurements were not captured in GSTR-2A until August 2020. Hence, there was no requirement to match such ITC with GSTR-2A, as Section 16(2)(aa) was introduced only from January 1, 2022. Furthermore, under Rule 36(1)(d), a Bill of Entry is the relevant document for claiming ITC on import of goods. Therefore, ITC cannot be denied merely due to a typographical error of reporting it in the wrong column of GSTR-3B.
*Case: Biocon Limited v. State of Karnataka, 2026-VIL-543-KAR*
Correctness: This ruling is correct, with one clarification — even after the introduction of Section 16(2)(aa), there is no requirement to match ITC on import transactions or SEZ procurements with GSTR-2A/2B
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