No ITC on inward supplies for in-house hospital providing free medical facilities to employees: AAR Facts: Chennai Port Trust (“the Applicant”) is engaged in supply of port services and incidental supply of goods like disposal of discarded assets. The Applicant has their own in-house hospital for use by the employees, retirees and their dependents, which is basically, a free centre where all the services and medicines are provided free to the employees. This provision of free medical care is mandatory as per the Regulations made under Major Port Trusts Act, 1963. In the course of above, the Applicant uses following goods and services – • Medical and diagnostic equipment; • Medical apparatus & instruments, medical consumables & disposable items and other machinery installed in the in-house hospital; • Spares for medical and diagnostic equipment, medical apparatus & instruments and other machinery installed in the in-house hospital; • Repairing Services of medical and diagnostic equipment, medical apparatus & instruments and other machinery installed in the in-house hospital. Issue involved: Whether the Applicant is entitled to take input tax credit (“ITC”) charged on the above-mentioned supply of goods and services which are used w.r.t. in-house hospital? Held: The Hon’ble Authority of Advance Ruling (AAR), Tamil Nadu, while observing Section 16(1) and Section 17(5)(g) of the CGST Act, 2017 (“CGST Act”) & Tamil Nadu GST Act, 2017 (“TNGST Act”) vide Order No. 32/AAR/2019 dated July 25, 2019, denied ITC to the Applicant on following grounds: • The Applicant is maintaining an in-house hospital within its port premises for providing health and medical cover exclusively to its employees and pensioners. The hospital is only a cost centre and the inward supply of medicine and related services is provided to the employees and pensioners without charging any separate consideration. • Evidently, the impugned goods and services are used for providing personal medical care to the individuals who are the employees and pensioners of the Applicant. They are in effect used for personal consumption of the employees, pensioners and dependents. • Therefore, as per Section 17(5)(g) of CGST/TNGST Act, ITC is not available for medical, diagnostic equipment, apparatus, instruments, consumables, disposables, spares and repairing services for these, which the Applicant is procuring for the consumption of its employees and pensioners and their dependents.