Wellness centres, too, may be liable to GST.
Wondering how? Our experts have collated a detailed analysis for you to have a clear understanding of the tax specifics for wellness services.
In the GST regime, practicing healthy habits daily to attain better physical and mental health may suffer tax liability. Usually, wellness and fitness centres provide these wellness services & exercise opportunities for fun, stress relief, and weight reduction.
Wellness and fitness centres offer personal training, yoga, acupuncture, nutrition supplement, sporting/fitness activities, spas, steam, and running tracks for weight reduction and physical fitness.
If these centres provide services described above:
- for consideration and
- in their course and furtherance of business
Then, these services are “supply” as per section 7 of the CGST Act, 2017, and come in the taxable regime of GST.
If the said activities are considered as supply, then identification needs to be done w.r.t classification, rate, composite/mixed supply/ individual supply, time, and place of supply.
While going through the term wellness/fitness activity, an individual may generally interpret it as an exempt service.
But, in the GST regime, the tax on these services varies due to various provisions.
So, to resolve these general issues of taxability of these activities that where they fall, i.e., either taxable or exempt, following are the analysis as under:
- So, if these services are provided by a clinical establishment and authorized medical practitioner or by way of transportation of a patient in an ambulance and if yoga services are provided by a charitable institution/ trust registered under 12AA of the Income Tax Act, 1961, then they fall under exemption notification (Serial No 74 and 1 respectively).
- But suppose these services are provided in another manner like through corporate trainers or independent yoga teachers (directly or an e-commerce platform). In that case, they shall be covered under the scope of taxability where the services fall under HSN: 999319. So, the overall rate of GST (as per serial no 31 of rate notification) would be 18% on such services.
If the services mentioned above are provided as a part of composite/ mixed services, then the rate of GST in case of:
- The composite supply shall be the rate at which the principal supply is taxable.
- The combined supply shall be the highest rate of any constituent supply of the combination.
Further, the value of the supply of services shall be the price paid/ payable for these services, and the location of the performance of these services will be the place of supply.
The liability to pay tax on such services shall arise
- on the date of issue of invoice or date of receipt of payment, whichever is earlier or
- If an invoice is not issued within the period, then the date of provision of such service.
- If a) & b) do not apply, then the date on which the recipient enters the same in his books.
Similar pronouncements are observed in Gujarat Advance Authority Ruling – Nimba Nature Cure Village.
Thus, the said services are not always exempt; hence the same may be taxable in different events and circumstances.
So, here the public needs to be aware of the nature of services.
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