Visiting wellness resort? Don’t expect GST relief
MUMBAI: At the crack of dawn, you will invariably find guests at any naturopathy resort performing ‘pranayama’ (deep breathing) on lush lawns. Typically, additional yoga exercises, ayurvedic treatments, massages, et al, as prescribed by the resort’s medical practitioners, would fill up a guest’s daily schedule.
At the end of this idyllic stay, it is likely that the guest would be handed over a bill replete with a goods and service tax (GST) levy of, say 18%, depending on the room tariff. In several cases, various benches of the Authority for Advance Rulings (AAR) have held that such wellness resorts that offer naturopathy services too do not fall within the classification of a GST-exempt clinical establishment.
The reason: The wellness resorts provide a composite supply that attracts a GST levy. Recently, the Appellate Authority for Advance Rulings (AAAR) in Uttarakhand state, in the case of Corbett Nature Reserve which housed a naturopathy centre, held that it cannot be treated as a clinical establishment. The AAAR upheld the ruling given earlier by the AAR.
In this case, the applicant had submitted that healthcare services provided by an independent unit within the resort—Aahana Naturopathy Centre—is a cli- nical establishment, which offers nature cure and yoga therapies. It has an authorised medical practitioner on its rolls and the facilities offered by this unit are available not just to in-house customers but are open to all. The centre is registered under the Clinical Establishment Act, 2010.
Based on these facts, the contention was that it qualified as a clinical establishment and should be eligible for exemption as a ‘healthcare services’ supplier according to entry 74 of notification 12/2017. However, the AAAR observed that Corbett Nature Reserve had advertised and marketed its accommodation service as its main service and naturopathy as an additional service.