GST on Healthcare Services in India
Healthcare is a fundamental need, and the government has ensured that essential medical services remain affordable. But what about GST? Is it charged on hospital bills or doctors’ fees? Let’s break down the gst on healthcare services and understand which services are exempt and which are taxable under GST.
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Are Healthcare Services Exempt from GST?
Yes. Under the GST law, most healthcare services are exempt, particularly those related to diagnosis, treatment, or care provided by:
- Hospitals
- Clinics
- Doctors
- Nursing homes
This ensures that essential medical services do not carry an added tax burden for patients.
GST on Hospitals
gst on hospitals providing clinical healthcare services is 0% (exempt). This includes:
- Room charges (except for luxury rooms)
- OPD and inpatient services
- Emergency treatments
- Surgical procedures
- Diagnostic tests (MRI, blood tests, etc.)
However, certain non-healthcare services offered by hospitals are taxable.
GST for Doctors
gst for doctors providing independent healthcare services is also exempt. This applies to:
- General practitioners
- Specialists (cardiologists, dermatologists, etc.)
- Visiting consultants at hospitals
- Home-visit doctors
When is GST Applicable?
GST applies only if a doctor:
- Offers non-medical consultancy services (like legal opinions, health coaching, medico-legal reports)
- Runs a clinic offering additional taxable services (like cosmetic enhancements or wellness packages)
Otherwise, regular doctor consultations and procedures are GST-free.
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GST on Allied Healthcare Services
| Service Type | GST Rate | Remarks |
|---|---|---|
| Pathology and diagnostic tests | Exempt | If part of healthcare service |
| Ambulance services | Exempt | Emergency transportation |
| Pharmacy inside hospital | Exempt | If medicines are part of treatment |
| Independent pharmacy (retail store) | 5% or 12% | GST applicable |
| Yoga, wellness centres | 18% | If not certified medical service |
Input Tax Credit (ITC) in Healthcare
Healthcare providers cannot claim ITC on inputs used in providing exempt services.
| Input/Expense | ITC Allowed? |
|---|---|
| Hospital furniture | ❌ No |
| Medicines used for treatment | ❌ No |
| Equipment (scanners, beds) | ❌ No |
| IT systems, admin software | ❌ No |
However, if a healthcare business provides both exempt and taxable services, it must separately track ITC eligibility and apportion ITC correctly.
Conclusion
Understanding the gst on healthcare services helps both providers and patients avoid billing mistakes and stay compliant. In short, most medical services remain tax-free, with GST applicable only to select add-on or premium offerings.
As a Chartered Accountant with over 12 years of experience, I am not only skilled in my profession but also passionate about writing. I specialize in producing insightful content on topics like GST, accounts payable, and income tax, confidently delivering valuable information that engages and informs my audience.
Frequently Asked Questions (FAQs)
- Are hospital services taxable under GST?No. Core healthcare services by hospitals are exempt from GST.
- What is the GST on hospitals if they charge high room rent?If non-ICU room rent exceeds ₹5,000/day, 5% GST is applicable on that charge.
- Is there GST for doctors running clinics?No, if the clinic provides only healthcare services. Yes, if offering additional non-healthcare services.
- Are ambulance services exempt from GST?Yes. Emergency ambulance services are GST-free.
- Can healthcare businesses claim Input Tax Credit?No, not for exempt healthcare services. ITC is allowed only on taxable services, if provided.
