GST for Doctors

Updated on: Jan 22nd, 2024

7 min read

The 47th GST Council meeting has clarified that doctors’ services provided in the form of Assisted Reproductive Technology (ART) or In vitro fertilisation (IVF) will be exempt from GST, as they fall under the definition of healthcare services.

Additionally, the council meeting reduced the GST rates applicable to ostomy and orthopaedic appliances, including artificial implants, from 12% to 5%. Furthermore, services provided by the operators of bio-medical waste treatment facilities to clinical establishments will attract a GST of 12% with the option to claim ITC.

So, where does the indirect tax regime stand on the applicability of GST for doctors after the changes made by the council meeting? Let’s understand in detail.

Applicability of GST on Doctor's Consultation/Health Service

Under the current taxation regime, all healthcare services doctors and hospitals provide are exempt from GST. Initially, these exemptions were provided vide Notifications No. 12/2017-Central Tax (Rate) and 9/2017 – Integrated Tax (R) dated 28th June 2017.

However, these exemptions were amended vide Notification No. 04/2022-CT(R) dated 13th July 2022 and are stated below.

The healthcare services delivered by clinical establishments authorised medical practitioners or paramedics are exempt under GST. However, this exemption will not be available to the services rendered in the form of provision of a room (excluding intensive care unit (ICU)/critical care unit (CCU)/neonatal intensive care unit (NICU)) by a clinical establishment for an amount exceeding Rs.5,000 per day. Furthermore, no input tax credit (ITC) can be claimed on these hospital room services.
The healthcare services offered in the form of a patient’s transportation in an ambulance, excluding those services mentioned in point (a) above, are also exempt from GST levy.

Please note healthcare services exclude hair transplants and cosmetic/plastic surgery from their remit unless they have been rendered for restoration or reconstruction of anatomy or bodily functions damaged by congenital defects, injury, trauma, or developmental abnormalities. Thus, healthcare services only include diagnosing, treating, or managing disease, deformity, injury, abnormality, or pregnancy under their ambit.

To further clarify, the GST for doctors is exempt from the following services:

Medical service	Treatment under GST
Outpatient Department Services (OPD)	Doctors’ consultation and treatment provided to patients without admittance to the hospital/clinical establishment are exempt from GST. However, GST is payable on the supply of medicines and implants through hospital-owned pharmacies to outpatients.
Inpatient Department Services (IPD)	Inpatient services, including doctors’ fees and consultancy charges, and supply of medicines, implants, consumables, bed charges, operation theatre rent, equipment charges, etc., are exempt from GST and are considered a composite supply. However, when medicine and food are offered on an optional and distinct basis, then GST needs to be paid.
Medical Test Services	All medical tests carried out in clinical establishments are exempt.
Medical Counselling Services	A doctor’s consultancy given for the purpose of cure is exempt from GST. But a consultation provided with the purpose of care will attract GST.
Cord Blood Bank Services	The services provided by blood banks for preserving stem cells are exempt from GST.
Ambulance Services	No GST is levied on ambulance services.
Veterinary Services	A doctor’s services rendered for the care of birds and animals are exempt under GST.

Also, X-Rays are bundled up with healthcare services and do not attract any GST. Similarly, services rendered by diagnostic centres in clinical establishments are not subjected to any GST levy.

But the following healthcare services are liable to GST.

Miscellaneous service	Treatment of service
Renting	A GST is levied on the rent paid to hospitals for the opening of medical shops on their premises
Waste Treatment Facility	The services delivered by the operators of the common biomedical waste treatment facilities to clinical establishments for treatment or disposal of bio-medical waste is subject to 12% GST with ITC.

GST Registration for Doctors

If the doctors in practice are solely providing exempt health care services as per the GST law, they are not liable for GST registration. Whereas, doctors must register on the GST portal when their total annual turnover exceeds Rs.20 lakh (for normal category states) or Rs.10 lakh (for special category states) if they are providing any other taxable services. They will need to pay GST on the medicines sold via their clinical establishment.

Registering under GST is mandatory when healthcare services are offered across several states. For the purpose of calculating annual aggregate turnover, one must add up both turnover from taxable and non-taxable sales. So, please note the annual turnover will include all taxable, tax-free, and exempted supplies of goods and services.

GST Rates and HSN and SAC Codes for Doctors

Consultation services rendered by doctors are exempt under GST. Healthcare services fall under chapter heading 99. We itemise the GST for doctors and hospitals and their HSN and SAC codes below.

Healthcare Services	SAC Code	GST Rate
Healthcare services by a veterinary clinic for animals and birds	9983	NIL
Provision of health care services by an authorised medical practitioner, a clinical establishment, or paramedics except for hospital rooms (excluding ICU/CCU/ICCU/NICU) costing over Rs.5,000 per day	9993	NIL
Ambulance services	9993	NIL
Rehabilitation, therapy, or counselling and such services provided by rehabilitation professionals recognised under the Rehabilitation Council of India Act, 1992, at medical establishments, educational institutions, or rehabilitation centres established by the Central Government, State Government, Union territory, or any entity registered u/s 12AA or 12AB of the IT Act, 1961	9993	NIL
Services delivered by a clinical establishment by way of room [other than CCU/ICU/ICCU/NICU] costing over Rs. 5,000 per day for the provision of healthcare services with no ITC claims	9993	5%
Human health and social care services	9993	18%
Services by way of treatment/disposal of biomedical waste or incidental processes by a prevalent bio-medical waste treatment facility to a clinical establishment	9994	12%

Healthcare Goods	HSN Code	GST Rate
Drugs or medicines, this includes their salts and esters, and diagnostic test kits, specified in List 1 appended to Schedule 1	30 or any chapter	5%
Formulations created from the bulk drugs specified in List 2 appended to Schedule 1	30	5%
Medicaments (inclusive of Ayurvedic, Siddha, Unani, Homoeopathic, and Bio-chemic systems) manufactured exclusively in accordance with the formulae depicted in the authoritative books specified in the 1st Schedule to the Drugs and Cosmetics Act, 1940, Homoeopathic Pharmacopoeia of India, the USA or the UK or the German Homoeopathic Pharmacopoeia and sold under the name as specified in this pharmacopoeia	30	5%
Drugs or medicines, this includes their salts and esters, and diagnostic test kits, specified at S.No.180 and formulations specified at S.No.181 in Schedule 1, intended for personal use	9804	5%
Other drugs and medicines for personal consumption	9804	12%
Orthopaedic appliances, including crutches, surgical belts, and trusses Splints and other fracture appliances Appliances that are carried or worn or implanted in the body to make up for a disability or some defect Artificial body parts Intraocular lens (excluding hearing aids)	9021	5%
Pharmaceutical goods that are specified in Note 4 to Chapter 3006, i.e., sterile surgical catgut, tissue adhesives for surgical wound closure, and other similar suture materials (this includes sterile absorbable surgical or dental yarns) Sterile absorbable surgical or dental haemostatics Sterile laminaria and sterile laminaria tents Steriledental or surgical adhesion barriers (absorbable or otherwise) Ostomy appliances Waste pharmaceuticals, excluding contraceptives	3006	12%

To know more about GST on medicines and pharmaceuticals, click here.

Availability of ITC for Doctors

Since healthcare service providers, including doctors, are exempt from paying any GST, they cannot claim any input tax credit (ITC). Additionally, the incorporation of 5% GST on hospital rooms, without allowing for ITC claims, has raised the cost of medical services. Even hospitals with their own waste treatment plants are ineligible to claim ITC, despite being liable to pay 12% GST.

Advance Rulings about GST for Doctors

The Gujarat Appellate Authority of Advance Ruling (AAAR) has stated in M/s Baroda Medicare Pvt Ltd (2022) that the supply of occupational health check-up (OHC) services by a hospital, including doctors, nursing staff, and paramedics on the hospital’s payroll will be exempt from GST.

Here, OHC services refer to health check-ups, ambulance facilities, and allied medical services provided to a corporation’s employees. Furthermore, health check-up camps conducted outside the hospitals will also not attract any GST. It is expected that this judgement will encourage employers to improve their worker’s health and safety, while also giving a fillip to the growth of rural healthcare.

The Maharashtra Authority of Advance Ruling (AAR) has notified in the case of M/s Jyoti Ceramic Industries Pvt Ltd (2022) that no GST will be applicable on the services provided by a dentist in the form of the fitment of artificial ceramic teeth, crown, bridges, and dental restoratives. However, this is subject to such fitment not being a part of cosmetic treatment.

Conclusion

In India, the majority of healthcare services are exempt under the GST regime. Therefore, there is no levy of GST for doctors for medical services rendered by them. However, with the 47^th GST council meeting levying a GST of 5% on hospital rooms, the cost of availing healthcare services is set to rise, as hospitals cannot claim any ITC on it.

FAQs on GST for Doctors

Is GST applicable to doctors’ fees?

No, a doctor’s fee is generally exempt under the GST regime.

How much is the GST on medicine?

There is no GST on medicines supplied to patients while they are undergoing treatment. However, GST will apply to the medicines sold by doctors and hospitals. For more details, check here.

What is the rate of GST for doctors’ consultation fees?

A doctor’s consultation fee is exempt under the GST regime. Thus, the applicable GST rate on doctors’ consultation fees is zero.

Is GST applicable to the hospital?

Generally, the healthcare services provided by a hospital are exempt under GST. However, a GST rate of 5% will be levied on the cost of a hospital room if it exceeds Rs.5,000 per day.

How much is GST on medical services?

Currently, most medical services are exempt under the GST regime. The exceptions are hair transplants and cosmetic and plastic surgery.

Quick Summary

The 47th GST Council meeting clarified that doctors’ services in ART and IVF are exempt from GST as part of healthcare services. Additionally, the council reduced GST rates for orthopaedic appliances to 5%. The indirect tax regime applies GST only to specific healthcare services and items, exempting most medical services. Doctors offering exempt healthcare services do not require GST registration.