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Dr. Sanjiv Agarwal, FCA, FCS

 Dr. Sanjiv Agarwal

Health care services have been specifically kept out ride the scope of GST net. This is a fact and a perception too. These include services provided by medical establishments, clinics, medical practitioners, diagnostic centers etc.

The exemption has been provided vide the following entry No. 77 in Notification No. 9/2017-Integratged Tax (Rate) dated 28.06.2017.

“77 Services by way of health care services by a clinical establishment, an authorized medical practitioner or para-medics.”

Thus, health care services provided by following shall be exempt from GST:

a) Clinical establishment,

b) Authorised medical practitioner, or

c) Para-medics.

The meaning of these expressions has been given in Notification No. 9/2017-Integratged Tax (Rate) dated 28.06.2017.

However, medicines sold by pharmacy are subject to GST at varied rates and so are items like stents, implants etc taxed.

The general rate of medicines etc, inter alia is covered under the following classification:

Chapter No. Items Rate
30 Drugs or medicines including their salts and esters and diagnostic test kits, specified in List 3 or List 4 appended to the Notification No. 12/2012- Customs, dated the 17th March, 2012, dated the 17th March, 2012. 5%
98 9804 Specified drugs and medicines [i.e. List, 1 of Notification No. 12 / 2012- Central Excise, dated 17.03.2012 and List 3, 4 of Notification No. 12/2012- Customs, dated 17.03.2012] intended for personal use. 5%
98 9804 Other drugs and medicines intended for personal use. 12%

The Government has however, also taxed implants such as artificial limbs which is a necessary and integral part of health care services in relation to loss of limbs. Such artificial limb is recommended as a post health care to restore life or to at least provide a workable living means so that one is not left to miseries. The GST shall be levied @ 5 percent (2.5% CGST + 2.5% SGST) or 5 percent IGST along with other items such as tricycle, wheel chair, walking aid etc. It is an irony that artificial limb has been equated to such equipments, though others are just aids. On the contrary, artificial limb is fitted to a body part.

The rates of GST on implants is @ 5% as per following classification:

(a) Coronary stents and coronary stent systems for use with cardiac catheters.

(b) Artificial kidney

(c) Disposable sterilized dialyzer or micro-barrier of artificial kidney

(d) Parts of the following goods, namely:-

(i) Crutches;

(ii) Wheel chairs;

(iii) Walking frames;

(iv) Tricycles;

(v) Braillers; and

(vi) Artificial limbs

Shockingly, all there items have been taxed but deserve to have been exempt fully. These are not luxury or cosmetic items meant for human consumption. Moreover, a large number of non-profit organizations are engaged in free or concessional supply of such goods.

There could be an argument that many big or corporate hospitals are also engaged in such supplies and charge a huge amount for this. But then, if we can tax hotels and restaurants at different tax rates based on categories on the basis of ‘ability to pay’, who stops the Government from adopting the same formula here. Tax big hospitals but spare such supplies generally. Tax officers, also human beings, must understand this and act upon. They are too answerable, at least to God.

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  1. rajendra says:

    Following are my queries

    1. What is Applicability of GST on the GP fees paid to the GP by the Hospital (General Practitioner who recommends to the patient to get treated in the Hospital but does not give treatment to the patient in the Hospital) ?These fees are booked in the System as Doctor fees / payments.Are hospital are liable to pay GST under RCM?

    2. applicability of GST in case of patients who do not pay directly to the Hospital but the Insurance Company (from whom the patient has taken mediclaim or an insurance policy) makes the payment to the Hospital.


    It is really shocking to note the apathy of the Govt on Differently abled persons when they go to the extent of taxing things like crutches.
    Jai Ho GST.

  3. Manish Kumar Sharma says:

    Dear Sir,
    We supplies electronic monitors and displays LED to hospitals specifically to be used for medical examination of illness.
    Is there any exemption available to us under GST.?

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July 2024