New GST on Healthcare Services in India
- Most core healthcare services provided by clinical establishments, authorised medical practitioners, and paramedics are exempt from GST.
- Diagnostic services, ambulance services, and telemedicine services may be exempt when provided as part of eligible healthcare services.
- Medicines supplied as part of healthcare services by hospitals may be treated differently from standalone retail pharmacy sales, which are taxed based on the applicable product classification.
- Healthcare providers cannot claim Input Tax Credit on inputs used for exempt healthcare services and must follow applicable ITC rules for taxable supplies.
- Proper GST compliance helps healthcare providers maintain accurate records and meet tax requirements.
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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New GST Rate on Allied Healthcare Services in India
The revised GST treatments for healthcare-related services and products apply from 22 September 2025.
| 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 | Transportation of patients as part of eligible healthcare services |
| Pharmacy inside hospital | Exempt | Medicines supplied as part of inpatient treatment may form part of the healthcare service |
| Independent pharmacy (retail store) | Applicable GST rate based on product classification | Medicines and healthcare products are taxed according to their applicable HSN classification |
| Yoga / wellness centres (non-clinical) | 5% without ITC | Covered under "beauty and physical well-being services" (Group 99972); reduced from 18% to 5% without ITC, effective 22 September 2025 |
| Telemedicine / online doctor consultation | Exempt | Healthcare service provided by a medical practitioner |
| Health insurance (individual policies) | Exempt (0%) | Individual health insurance policies moved to nil GST from 22 September 2025 |
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Note: GST rates on medicines and healthcare products depend on their specific HSN classification. Many medicines previously taxed at 12% were reduced to 5% from 22 September 2025.
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.
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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)
| Pathology and diagnostic tests | Exempt | If part of healthcare service |
|---|---|---|
| Ambulance services | Exempt | Transportation of patients as part of eligible healthcare services |
| Pharmacy inside hospital | Exempt | If medicines are supplied as part of treatment |
| Independent pharmacy (retail store) | 5% or 12% | GST applicable based on medicine/product classification |
| Yoga, wellness centres | 18% | Taxable unless covered under applicable healthcare service exemption |
Pathology and diagnostic tests
Exempt
If part of healthcare service
Pathology and diagnostic tests
Exempt
If part of healthcare service
Pathology and diagnostic tests
Exempt
If part of healthcare service
Pathology and diagnostic tests
Exempt
If part of healthcare service
Input Tax Credit (ITC) in Healthcare
Healthcare providers cannot claim ITC on inputs and services used exclusively for providing exempt healthcare services.
| Input/Expense | ITC Allowed? |
|---|---|
| Hospital furniture | Depends on use and applicable ITC rules |
| Medicines used for exempt treatment | No |
| Equipment (scanners, beds) | Depends on use and applicable ITC rules |
| IT systems, admin software | Depends on use and applicable ITC rules |
Input/Expense
ITC Allowed?
Input/Expense
ITC Allowed?
Input/Expense
ITC Allowed?
Input/Expense
ITC Allowed?
However, if a healthcare business provides both exempt and taxable services, it must separately track ITC eligibility and apportion ITC as per applicable GST provisions.
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.
