GST on Health Care services:
In the Service Tax era, health services are exempted. Such exemption is also kept in GST Era. According to Notification No 9/2017 of IGST which is produced below for ease of understand
“Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above.”
For the purpose of above the term “clinical establishment” means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases;
For the purpose of above the term “authorised medical practitioner” means a medical practitioner registered with any of the councils of the recognized system of medicines established or recognized by law in India and includes a medical professional having the requisite qualification to practice in any recognized system of medicines in India as per any law for the time being in force;
For the purpose of above the term “health care services” means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma;
Turnover for the purpose of Health Services:
It is the sum total of all outward supplies of goods & services means
- Exempted supplies
- Tax free supplies
- Taxable supplies
In case of health care services these services are exempted and therefore health care services is not supposed to take any registration no. under GST.
But if any small part of supply is taxable and if turnover including above supplies exceeds 20 lakhs then it is liable for registration under GST.
What supplies are taxable in health care services?
- If hospital runs medical shops in their own premises on rent basis then such rent income would be liable to tax under GST. & for the purpose of turnover calculation such rental income would be included. or hospital themselves sales medicine then also it is taxable at rate specified under GST Schedule.
Whether services related to health care like ambulance, blood banks are taxable or exempted?
Following services are exempted under notification no.9/2017 through various entries:
- Entry No. 48
Services provided by veterinary doctors are exempted under this entry.
- Entry No. 76
Services provided by cord/other blood bank for preservation of the stem cells or any other services such preservation is also exempted under this entry.
- Entry No. 77
- Services provided by ambulance
- Services through medical test ( either in own hospital or in separate place )
- Room Rent charged for patient is also exempted under this entry.
- Entry No. 78
Services provided to hospital by way of treatment & disposal of bio medical waste is exempt under this entry.
Whether any reverse charged is applicable to such services?
The answer is Yes. If any health care service unit is taken consultancy
service from Advocate then it is required to comply with section 9(3) of
the act. Also if the unit is not registered then it requires to take registration under GST comply
with provision.
By- CA Monika N Rathi
