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CA Intermediate · Taxation · Exemptions from GST

Dr. Meera runs a clinic in Pune. During a month she receives Rs 6,00,000 for health care services by a clinical establishment, Rs 1,50,000 as rent for letting out a shop in the clinic building, and Rs 80,000 for cosmetic surgery not needed for restoring anatomy or functions after trauma or illness. Assuming no other exemptions apply, what is the value of her taxable supply?

The taxable value is Rs 2,30,000. Health care services are exempt, but shop rent of Rs 1,50,000 and cosmetic surgery of Rs 80,000, which is not for restoring anatomy or function, are taxable and must be added together.

  1. ARs 2,30,000Correct
  2. BRs 1,50,000
  3. CRs 80,000
  4. DRs 8,30,000

Explanation

Health care services by a clinical establishment are exempt, so Rs 6,00,000 is excluded. Commercial shop rent is taxable at Rs 1,50,000. Cosmetic surgery not required for restoring anatomy or function is not covered by the health care exemption, so Rs 80,000 is taxable. Taxable value = 1,50,000 + 80,000 = Rs 2,30,000. Rs 1,50,000 omits the cosmetic surgery.

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