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.

New 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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GST Rates

New GST Rate on Allied Healthcare Services in India

The Government of India is updating GST rates effective after 22 Sep 2025. Below are the expected new GST treatments for allied healthcare services (no compensation cess).

Service Type	New GST Rate	Remarks
Pathology and diagnostic tests	Exempt	When supplied by a clinical establishment / authorised medical practitioner as part of healthcare
Ambulance services	Exempt	Emergency transportation of patients
Pharmacy inside hospital	Exempt	Medicines supplied as part of inpatient treatment (composite healthcare supply)
Independent pharmacy (retail store)	0% or 5%	Lifesaving drugs at 0%; other medicines at 5% (12% slab discontinued)
Yoga / wellness centres (non-clinical)	18%	Taxable unless provided as recognised healthcare by a clinical establishment
Telemedicine / online doctor consultation	Exempt	Healthcare service by medical practitioner
Health insurance (individual policies)	Exempt (0%)	Premiums on life & health insurance moved to nil-rated

Note: Under the rationalised slabs, former 12% medicine lines align to 5%; exemptions for core healthcare continue.

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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Old GST on Allied Healthcare Services

(Old GST Rates – Applicable Until 21st September)

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.

Hitesh Aggarwal

Chartered Accountant

MRN No.: 529770

City: Delhi

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

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.

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