Exemptions to health care Services under GST
Exemptions are provided vide Notification No. 12/2017-Central Tax (Rate) dated 28-06-2017 and Notification No.9/2017 – Integrated Tax (Rate) dated 28-06-2017. Exemption to Health Care Services by way of:
(1) Health Care Services by a Clinical Establishment, an Authorised Medical Practitioner or ParaMedics;(2) Services provided by way of Transportation of a patient in an Ambulance other than those specified in (a)above.
Requirement of Registration
A Doctor providing both exempted & non exempted services has to consider the total turnover from exempted & non exempted services. Thus, if the total turnover from all services exceeds the exemption threshold limit GST registration would be required. Aggregate turnover includes taxable as well as exempted supplies. A GST registered Medical Professional has to report both the exempt & non-exempt turnover in the GST return.
Services Provided By The Health Care Professionals & Their Taxability
Few Healthy Prescriptions From CBIC Circulars
Question: Hospitals hire senior doctors/ consultants/ technicians independently, without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer employee relationship. Will such consultancy charges be exempt from GST? Will revenue take a stand that they are providing services to hospitals and not to patients and hence must pay GST? However, GST is payable on supply of Medicines, implants, consumables to out-patients through hospital owned pharmacy to outpatients However, if food & Medicine is supplied separately on optional basis, it is not a composite supply. Hence, GST is payable. Answer: Health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt. [Sl. No. 74 of notification No. 12/2017- CT(Rate) dated 28.06.2017 as amended refers]. Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. (CBIC circular No. 32/06/2018-GST dated 12-02-2018) Question: Hospitals charge the patients, say, Rs.10000/- and pay to the consultants/ technicians only Rs. 7500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc. Will GST be applicable on such money retained by the hospitals? Answer: Healthcare services have been defined to mean 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[para 2(zg) of notification No. 12/2017- CT(Rate)]. Therefore, hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt. (CBIC circular No. 32/06/2018-GST dated 12-02-2018) Question: Food supplied to the patients: Health care services provided by the clinical establishments will include food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers. When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST Answer: Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable. (CBIC circular No. 32/06/2018-GST dated 12-02- 2018)
Clarification Tablets
Role of CMA
CMAs can provide Value Added services to this sector like Impact of GST on Health Care Industry, Price Fixation of various Health Care Services, Supply Chain & Logistics Distribution Management of various Medical Equipments, Participation in development of Systems, Process and Controls, Complete analysis and evaluation of an ERP or Accounting System of Health Care Organization.
