GST on Healthcare, Hospitals and Diagnostic Laboratories

GST on healthcare is largely exempted for core medical services — but there are important distinctions between exempt clinical services and taxable supplies like medicines, cosmetic procedures and medical equipment. Here is the complete guide for hospitals, clinics, diagnostic labs and healthcare providers.

Exempt Healthcare Services

• Services by hospitals, clinics and doctors: All clinical medical services (consultation, diagnosis, treatment, surgery) — fully exempt from GST
• Diagnostic laboratory services: Blood tests, X-rays, MRI, CT scan, pathology — exempt from GST (Notification 12/2017-CT Rate — "healthcare services")
• Ambulance services: Fully exempt
• Services by authorized medical practitioners: Fully exempt
• Veterinary services: Exempt
• Services by AYUSH practitioners (Ayurvedic, Homeopathic, Unani, Siddha): Exempt

Taxable Healthcare-Adjacent Services

• Cosmetic or plastic surgery (not medically necessary — beauty enhancement): 18% GST
• Health/fitness clubs and gyms: 18% GST
• Room charges in hospitals above ₹5,000/day (non-ICU): 5% GST — note: ICU rooms remain exempt
• Health insurance premiums: 18% GST (not exempt)

Medicines and Pharma Products

• Life-saving drugs and oncology medicines: 5% GST
• Vaccines: 5% GST
• Medicines (general): 12% GST (most common rate)
• Ayurvedic/Homeopathic medicines: 12% GST
• Medical devices and equipment: Various rates (0%, 5%, 12%, 18%) depending on HSN code

ITC for Hospitals

• Hospitals providing exempt healthcare services cannot claim ITC on inputs used for those services
• If a hospital also has a pharmacy (selling medicines — taxable supply): ITC can be claimed proportionally for the pharmacy portion (Rule 42 apportionment)

Conclusion

GST on healthcare is predominantly exempt — but medicines, health insurance, cosmetic procedures and high-value room charges are taxable at varying rates. SPOTON provides GST advisory for healthcare providers, diagnostic labs and hospitals across Kerala. Contact us for expert healthcare GST compliance services.