A wellness health centre in the name of “healthcare service” has been running across the country. The Appellate Authority for Advance Ruling (AAAR) has tightened the screw as most of the wellness centres are running in hotels, resorts, and other plush areas.
Health therapies, which take place in hotels and resorts, guest houses, clubs, and so on, occupy luxurious rooms. Those who are running their wellness centres in such places have to pay GST of 5%, 12% or 18% depending on the number of rooms.
The Appellate Authority for Advance Ruling (AAAR) has said that health therapy services offered by wellness centres that are part of a hotel or resort cannot be classified as “healthcare services” and are therefore taxable.
The AAAR came in favour of the order of the Uttarakhand AAR that had earlier ruled that these wellness centres are similar to hotels and resorts and provide space and food akin to hotels and resorts.
The order came in the matter of Corbett Nature Reserve, Ramnagar Nainital. The resort has been running an independent unit, namely “Aahana Naturopathy Centre”, which is registered under the Clinical Establishments Act, 2010, for providing natural cure (drugless cure) and healthcare services (i.e. yoga therapies).
“The Appellant advertised and marketed their accommodation service as their main service and Naturapathy as an additional service and hence, the former becomes’ principal supply ‘while the latter, in addition to other services, forms part of that’ ‘composite supply’,” AAAR said in its order given earlier, the details of which were released on Wednesday.
“Wellness centres where healthcare therapy is offered on a residential basis would be classified as “accommodation services” and not “healthcare services.” “This ruling on the classification of services would mean that all wellness centers, including residential yoga centres, residential Naturopathy centres, residential acupuncture centers, or residential Ayurveda centers, are required to pay a tax of 12%, 18%, or 28% from July 1, 2017 instead of the zero tax applicable on healthcare services,” said