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Are you paying GST on total medical bill?

In India, healthcare has become a booming industry due to the inadequate government-run hospitals and the scarcity of doctors. As a result, numerous corporate hospitals and small nursing homes have sprung up across the country, offering medical services to those who can afford them. However, with the implementation of the Goods and Services Tax (GST) system, even hospitals have come under its ambit since July 2022. It is important for patients to understand what healthcare services are exempted from GST and what falls under its purview.

Understanding GST and Exemptions in Healthcare

Under the GST framework, healthcare services provided by clinical establishments, authorized medical practitioners, and paramedics are exempted from taxation. This includes doctors' consultation and treatment provided at the Outpatients Department (OPD) without hospital admission. Inpatient services, such as doctors' fees, consultancy charges, supply of medicines, implants, consumables, bed charges, operation theatre rent, and equipment charges, are also exempt from GST. However, if medicine and food are offered on an optional and distinct basis, GST needs to be paid.

It is important to note that certain services and medical supplies have different GST rates. For instance, human blood and its components, contraceptives, sanitary napkins, and tampons are exempt from GST. On the other hand, certain items have a 5% GST rate, including animal or human blood vaccines, insulin, oral rehydration salts, diagnostic kits for detecting hepatitis, and various specified drugs.

The GST rate for other medical items and supplies ranges from 12% to 28%. For example, items such as wadding, bandages, gauze, tooth powder, surgical rubber gloves, X-ray machines, contact lenses, and spectacle lenses fall under the 12% GST rate. Medical-grade oxygen, hydrogen peroxide, and other medical-grade products are also taxed at 12% GST. However, pharmaceutical products and medicines are not taxed at the highest rate of 28% GST.

Exemptions on Specific Healthcare Services and Products

To gain a better understanding of the GST exemptions in healthcare, let's explore specific services and products:

Hospital Room Services

When it comes to hospital room services, excluding intensive care units (ICU), critical care units (CCU), and neonatal intensive care units (NICU), a clinical establishment can provide rooms for an amount up to Rs 5,000 per day without GST. However, any amount exceeding this limit will be subject to GST. It is important to note that no input tax credit (ITC) can be claimed on these hospital room services.

Medical Tests

Medical tests conducted in clinical establishments are exempted from GST. This includes a wide range of tests and diagnostic procedures, allowing patients to undergo necessary examinations without any additional tax burden.

Blood Banks and Stem Cell Preservation

Services provided by blood banks for preserving stem cells are exempted from GST. This exemption helps individuals and families who choose to store stem cells for potential future medical use. It encourages the preservation of these vital cellular resources for various medical purposes.

Ambulance Services

The transportation of patients in an ambulance is also exempted from GST. This includes the cost of patient transportation to and from healthcare facilities in emergency situations. The exemption aims to ensure that individuals receive timely and efficient medical assistance without any additional financial burden.

Veterinary Services

Services provided by veterinary clinics for treating animals or birds are also exempted from GST. This exemption extends to the healthcare needs of pets, farm animals, and other creatures in need of veterinary care.

Ensuring the Right GST on Your Medical Bill

To ensure that you are paying the correct GST on your medical bill, it is crucial to be aware of the exemptions and rates associated with different healthcare services and products. Here are a few key points to keep in mind:

  • Verify the GST levied on your bill during the discharge process. If you notice any discrepancies or have doubts about the charges, seek clarification from the hospital administration before making payment.
  • Understand the services and items exempted from GST. This will help you identify any incorrect charges and prevent unnecessary tax payments.
  • Be aware of the GST rates for specific healthcare services and products. This knowledge will enable you to assess the accuracy of the taxes applied to your bill.
  • Consult with your healthcare provider and insurance company to better understand the expenses covered by your policy. This will help you determine which services are subject to GST and which are not.
  • Keep track of your medical expenses and receipts for future reference. This documentation will be helpful for any potential audits or disputes regarding GST payments on healthcare services.

By being proactive and informed, you can ensure that you are paying the correct GST on your medical bills and avoid any potential scams or overcharges.

Conclusion

With the implementation of the GST system in India, it is essential for patients to understand the exemptions and rates associated with healthcare services. While certain services and products are exempted from GST, others have specific rates ranging from 5% to 28%. By familiarizing yourself with these regulations, you can protect yourself from unnecessary financial burdens and ensure that you are paying the right GST on your medical bills. Stay informed, ask questions, and advocate for your rights as a patient to receive transparent and accurate billing information.

 

author

The Tax Heaven

Mr.Vishwas Agarwal✍📊, a seasoned Chartered Accountant 📈💼 and the co-founder & CEO of THE TAX HEAVEN, brings 10 years of expertise in financial management and taxation. Specializing in ITR filing 📑🗃, GST returns 📈💼, and income tax advisory. He offers astute financial guidance and compliance solutions to individuals and businesses alike. Their passion for simplifying complex financial concepts into actionable insights empowers readers with valuable knowledge for informed decision-making. Through insightful blog content, he aims to demystify financial complexities, offering practical advice and tips to navigate the intricate world of finance and taxation.

Frequently Asked Questions

Yes, medical bills for goods and services provided by healthcare providers are subject to GST in India, unless they fall under specific exemptions or are classified as zero-rated supplies.

Certain medical services and supplies, such as healthcare services provided by doctors, nurses, and hospitals, as well as essential medicines, diagnostic tests, and medical equipment, may be exempt from GST or attract a lower rate of tax.

GST on medical bills is calculated based on the applicable GST rate for the specific goods or services provided. The GST amount is added to the total bill amount, which includes the cost of medical treatment, supplies, and services.

The GST rate applicable to medical bills varies depending on the nature of the goods or services provided. Essential healthcare services and supplies may be exempt from GST or attract a lower rate, while certain non-essential services may be taxed at the standard GST rate.

Yes, certain medical treatments, supplies, and services may be eligible for exemptions or concessions under GST, particularly those considered essential for healthcare purposes or provided by charitable institutions.

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