Aster DM Healthcare Ltd has received a demand order from the Joint Commissioner of Central Tax, GST Commissionerate, Bengaluru East, regarding the taxation of Covid-19 vaccination services. The order, issued under Section 74(1) of the Central Goods and Services Tax (CGST) Act, 2017, demands a GST payment of ₹1.08 crore, along with a 100% penalty of ₹1.08 crore, bringing the total claim to ₹2.16 crore.
According to the GST authorities, the sale of Covid-19 vaccines qualifies as a “composite supply,” where the principal supply is the vaccine itself, and the auxiliary supply is the service of administering the vaccine. Based on this interpretation, the transaction is taxable at a rate of 5% (CGST 2.5% and SGST 2.5%).
Aster DM Healthcare received the demand order on March 19, 2025. The company, however, maintains that the claim made by the authorities is not legally maintainable. Aster DM stated that the order will not have any material impact on its financials or operations and that it is currently evaluating legal options to challenge the order at the appropriate appellate forums.
This development highlights the ongoing disputes surrounding the tax treatment of healthcare services, particularly Covid-19 vaccination charges, and raises concerns about similar actions against other healthcare providers.
