The 47th GST Council meeting brought important clarifications about the applicability of GST (Goods and Services Tax) for doctors. Key changes include the exemption of GST on Assisted Reproductive Technology (ART) and In vitro fertilization (IVF) services, recognizing them as healthcare services. Additionally, the GST rates on orthopedic appliances and implants were reduced from 12% to 5%, making these essential items more affordable. Services related to bio-medical waste treatment for clinical establishments will now attract a GST of 12% but with the option to claim an Input Tax Credit (ITC).
Is GST Applicable to Doctors?
Generally, healthcare services provided by doctors and hospitals are exempt from GST. This exemption was first introduced through Notifications No. 12/2017 and 9/2017, and later revised by Notification No. 04/2022. However, these exemptions were amended vide Notification No. 04/2022-CT(R) dated 13th July 2022 and are stated below.
Exempt Services:
- Healthcare services provided by clinical establishments, authorized medical practitioners, or paramedics are exempt from GST.
- Ambulance services and medical tests in clinics or hospitals are also exempt.
- Inpatient (IPD) and outpatient (OPD) services provided by hospitals, including doctor’s fees, bed charges, and medicines, are GST-free.
Further Exceptions of GST for Doctors
Also, X-rays are bundled with healthcare services and do not attract GST. Similarly, services rendered by diagnostic centers in clinical establishments are not subject to any GST levy.
However, the following healthcare services are liable to GST
When Do Doctors Need GST Registration?
Doctors providing only exempt healthcare services are not required to register for GST. However, if they provide taxable services (such as selling medicines or implants), and their turnover exceeds ₹20 lakh (₹10 lakh for special category states), they must register for GST.
For doctors practicing in multiple states, GST registration is mandatory if they cross the turnover threshold. It’s important to calculate the total annual turnover, which includes both taxable and exempt supplies.
GST Rates and HSN and SAC Codes for Doctors
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 on GST for Doctors
Recent rulings have further clarified the applicability of GST for healthcare services. For instance, the Gujarat AAAR ruled that occupational health check-ups provided by hospitals to corporate employees are exempt from GST. Similarly, dental services related to artificial teeth and crowns, if not cosmetic, are also exempt.
Conclusion
For most doctors in India, GST is not a concern for their day-to-day medical services, as they are largely exempt. However, it is important to stay updated on exceptions like hospital room services and the sale of medicines, which may attract GST. Understanding when to register and how to manage taxable services is key to ensuring compliance with GST regulations.
To register for our next masterclass please click here https://linktr.ee/docpreneur
