Goods and service tax is a major factor which has a potential to cover the economic base of the country along with its sidelines also India is not just one of the biggest performing nations for generics, however additionally encountering a blast in remedial tourism which creates extra returns for the Healthcare Industry. India’s Pharmaceutical Industry as of now is 3rd largest as far as volume and 14th largest regarding esteem all inclusive. As populace is persistently developing, so is the requirement for good Healthcare Services, which brings the need of growing more qualified personnel to fill the present crevice in the part and giving state-of-the-workmanship offices and innovations to patients.
Latest Update in Healthcare Industry Under GST
12th July 2023
- A decision has been made to GST-exempt Dinutuximab (Quarziba) medicine from IGST when imported for personal use according to the 50th GST Council.
27th October 2022
- The Kerala GST AAR has published the order for the M/s. Uralungal Labour Contract Co-operative Society Ltd (ULCCS). The order said, that 18% GST is applicable on works contract services for construction supplied to Malabar Cancer Centre. Read Order
22nd July 2022
- The Authority for Advance Ruling of Andhra Pradesh has ruled that the 5 per cent GST rate applicable on vaccination of COVID-19 administered via hospitals. Read more
29th June 2022
- “47th GST Council Meeting: Room rent (excluding ICU) exceeding Rs 5000 per day per patient charged by a hospital shall be taxed to the extent of amount charged for the room at 5% without ITC.”
- “Like CETPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12% so as to allow them ITC”
24th January 2022
- Maharashtra GST AAR has notified a new judgment ruled for the Jyoti Ceramic Industries that there is no GST applicable on the Artificial Teeth, Crown, Bridges. Read Order
12th January 2022
- Gujarat Authority for Advance Rulings (AAR) has ordered that the services of health care provided through hospitals on a lump-sum payment for many years are exempt from the GST regime. read order
20th December 2021
- AAR (Authority of Advance Ruling) of Karnataka has been ordered to pay a 12 per cent GST levy on laboratory & diagnostic reagents. “The Applicant, Bio-Rad Laboratories India is a limited company, registered under the GST Acts (CGST/KGST) 2017” read order
Center Reconsiders GST on COVID-19 Vaccine
Vaccine maker Bharat Biotech has set out the rate of his vaccine named COVAXIN at Rs 600 per dose to the state government and Rs 1200 per dose to the private hospitals. In between the high covid-19 vaccine rates the center is thinking goods and services tax GST waiver to lesser the rates towards state government and private hospitals.
Health Care Services May Get Relief in Tax Rate Under GST
Government of India is leaving no stone unturned to ease the Healthcare services and bring down its cost to the affordability. Undoubtedly, the Healthcare Federation of India (NATHEALTH) which is an apex body for health-maintenance services is also not lacking behind in backing government’s intentions with proposals which will result in the availability of ITC for health care service providers and quality health services to the people residing in underdeveloped areas.
NATHEALTH’s approach and proposals for Budget 2020 will not only ensure consistent quality of service but also bring down the cost of wellness services & programmes for the consumers as the costs are ultimately be borne by costumers because of the unavailability of ITC for health care providers under the current practices. Further, this will boost the savings for health professionals and increase their investment capacities.
Revised Hospital Room Rent with GST Tax Slabs
| Hospital Room Rent | Applicable GST Rates |
|---|---|
| Below Rs.1000 | 0% |
| Rs.1000 to Rs.2499 | 12% |
| Rs.2500 to Rs.7499 | 18% |
| Above Rs.7500 | 28% |
The final GST rates have been disclosed and have included numerous categories from the wide range of healthcare amenities.
| Tax Rate | Healthcare Commodities |
|---|---|
| 0% | Contraceptives, Human Blood |
| 5% | Medicines, Animal or Human Blood Vaccines |
| 12% | Ayurvedic Medicines, Medicinal Grade Hydrogen Peroxide, Anaesthetics, Potassium Iodate, Iodine, Steam, Glands And Other Organs For Organo-Therapeutic Uses, Ayurvedic, Unani, Homoeopathic Siddha Or Biochemical Systems Medicaments, Sterile Suture |
| 18% | Tampons, Disinfectants |
The health-care industry has been hit by the GST tax rates and various other rules and regulations. But the goods and services tax has created a hazardous situation for the normal person who is drifted under the fate. As the tax charges are geared up to a hefty number it seems that the GST has cursed in the health-care industry more than it has blessed. It is said that if there is an ailment, there is a medicine but this has changed after the 15th August took away the independence of health-care to many of those underprivileged.
After 15th August, as the new stock will arrive, it will lash out the tax rates on the general public as many important heart and kidney operations are under the slab rates 12 to 28 percent GST which will increase its costing per individual. While it is learned that around 80 percent of life-saving medicines will be expensive after the August timeline.
While many hospitals and specialists are going according to the old rates but it is done that once new stocks come in, the revised rates will be applicable. The experts are very much shocked concerning the tax rates over the life-saving medicines and machines and predicted that if the government did not take any actions then a certain protest is awaiting.
Let’s examine the fields where the impact will be severe along with the expert comment over it:
| Department | Summary | Pre-GST | Post-GST | Items Getting Expensive | Impact | Expert Comments | |
|---|---|---|---|---|---|---|---|
| Nephrology | Dialysis Under Heavy Tax | 5% | 12% | Homo Dialysis Machine, Tubings, Dialysis Needles, Catheter, Plasma filter, Dialysis fluid | Currently, dialysis is charged at a rate of INR 1800 to 2200 which will be further burdened with INR 300. According to this, those individuals who are getting dialysis treatment 10 to 12 times per month will be getting additional INR 40,000 annual burden. | Nephrologist Doc. Alok Jain from Fortis Hospital mentioned that the must be tax-free and the rates must be revised very soon. | |
| Heart Treatment | Pacemaker under 18 percent GST | 5.5% | 12% to 18% | Lead valve of Pacemaker, Device (Heart failure machine CRT – ICD) | Pacemaker worth 1.5 lakh will be costing 15-20 thousand extra after the August timeline. ICD also will be costing at an extra 40 thousand which comes at currently 3 lakh per machine. Currently, there are 200 pacemakers installed across the state. | Doctore Jitendra Makkad of EHCC hospital mentions it as an error by the government and seeks for a correction as soon as possible. | |
| Eyes Treatment | Lens surged upto INR 500 while operations became 15 percent costlier | 9% | 12% to 18% | Checkup machines, Indian lens INR 1200 to 3000 has surged INR 1500 to 3500. Foreign machines which used to cost at INR 5000 to 9000 currently they are hiked at INR 6000 to 10000. | Lenses prices have hiked up to 12% from 9%, while many of the machines are attracting 28%. Along with the lenses, the operations cost has also increased up to 15 to 20%. | Senior professor Kishor Kumar of SMS hospital assured that government hospitals would be away from the impact however, private hospitals would be costlier upto 15 to 20%. | |
| Orthopedics | Support devices getting costlier, Implants neutral | 5% | 12% to 18% | Disposable items, Bone cement, Operation equipment like drill machines and its batteries. | Implant taxes are 5% but the supported items in operation are now under 7% to 28% tax rate. Finger coat, Kneecap, Brep belt also attract 12% now. | Rajendra Bhargav, a dealer in ortho implants mentioned that there will be an overall 15 to 20% higher tax rates while multiple meetings are being conducted to understand the future procedures. | |
| Cancer treatments | Except for blood cancer treatments, every other treatment of cancer costs 12% extra | 5% | 7% to 12% | – | All the imported medicines became getting expensive. Advanced stage cancer patient will be incurring INR 10,000 extra on the treatment. | Mahaveer cancer hospital director PS Lodha stated that Anticancer medicines will be getting costlier by 6.5% as there will be 12% GST applicable on them. However, it has to be seen how much exercise will be reduced. |
These Health-care Products also in the List of Expensive Category:
| Items | Pre-GST | Post-GST |
|---|---|---|
| Surgical Item | 5.5% | 12% |
| Wing Scale | 5% | 28% |
| Hot Water Bag | 5.5% | 28% |
| Wheel Chair | 5% | 18% |
In the present scenario, there is about 17 item in the negativity list in which there is no service tax is levied on the items. Including approximately 60 services similar to pilgrimage, health-care, education, skill development, journalistic activities which are exempted from the service tax duty and are not bounded by the abrupt taxation.
In India, 5% of the GDP is spent on Health-care – 4% by the private division and now the Indian Health-care Industry has been exponentially developing in the current year, and the Ministry of Health focuses on the advancement of 50 new innovations before the current year’s over to treat ailments, for example, cancer and tuberculosis. To draw in more foreign direct investment (FDI), the Government raised the FDI top for brown-field Pharmaceutical investments to 74% in June. Inevitably, 100% FDI is allowed in greenfield Pharmaceutical investments and past 74% under government endorsement in brown-field Pharmaceutical investments.
Recommended: Easy Guide of Reverse Charge Mechanism Under GST with All Aspects
As of late, the release of the most anticipated Goods and Services Tax (GST) Bill got the consideration all through all businesses in India. It ought to profit most segments and make taxation less demanding as it replaces a few distinct duties and taxes. The Health-care Industry in India has turned out to be one of the largest sectors in the nation with respect to business and income. As Health-care propagates, so do the tax incomes for India as of late, India’s Government chosen to execute GST, which subsumes various taxes of the vast State and Central Tax framework in India into one formally dressed tax framework.
GST is relied upon to positively affect the Pharmaceutical part. It will help the business by streamlining the tax structure since eight different taxes are exacted in the Pharmaceutical Industry right now. A solidification of all these into one tax would ease working together, too as mitigate the falling effects of numerous taxes connected to one item. Aside from this, GST will likewise bring about yielding proficiency by streamlining the store network which can alone add 2% to India’s Pharmaceutical market measure. Since GST will help Pharmaceutical companies rationalise their production network, they should audit their circulation systems and technique.
Moreover, GST usage will likewise conceive a seamless stream of the tax credit, represent a change in general consistency and is additionally anticipated that would make a level-playing field for Pharmaceutical organisations in India. A major favourable position for organisations will be diminished in exchange costs with the discontinuance of Central Sales Tax (CST). GST is required to cut down the assembling cost and even a 2% decrease underway or appropriation cost is acceptable to include over 20% to benefits.
Read Also: Meaning of SGST, IGST, CGST with Input Tax Credit Adjustment
Then again, Pharmaceutical organisations will encounter enhanced operational effectiveness, diminished manufacturing & exchange costs and also enhanced compliance. Also, it will profit Pharmaceutical companies’ warehousing methodology. Starting at now, organisations kept distribution centres in various States to maintain a strategic distance from CST of various States. Presently, with CST subsumed under GST, they can merge stockrooms at vital areas as they will just need to pay Integrated GST (IGST) on inter-state supplies of Goods and Services.
Generally speaking, the impacts of GST usage on the Healthcare and Pharmaceutical segment is somewhere very hard for the general public. The Healthcare Industry, on the off chance that the tax rate is set at an effective level, will profit as GST absolutely diminishes complexities and evacuates many obstacles to the business’ growth. The business is on a way of promising development and expanded profitability.
Cost Of Treatment Is Up Due To Higher Tax Rates
GST has increased the cost of various medical equipment which is necessary for everyday life. For an example, the dialysis cost has increased for kidney patients as hospitals are paying 12% tax on a dialysis machine, tubings, dialysis needles, Catheter, plasma filter, dialysis fluid which was earlier in the tax slab of 5% tax rate.
The fact is that around 2,10,000 patients suffer from kidney related problems in a year and require a transplant of a kidney. From them, only 6,000-7,000 are capable of getting the kidney from donors and the life of rest only depends on regular dialysis. The calculation shows the cost for each patient for dialysis is costing 40,000 extra in a year.
The dialysis process costing more is just an example of how harshly the patients are affected by higher tax rates. There are so many other daily using medical equipment went high like the lead valve of a pacemaker are imposed by 18% tax and CRT-ICD are taxed at 12% which is costing 15,000-20,00 extra on pacemaker and 40,000 extra on CRT-ICD.
Cost of Blood-Related Supplies Increases under GST
After the introduction of new tax system, the blood related supplies bring under the ambit of Goods and Services Tax (GST) System. GST rates being levied up to 12 percent on blood related supplies. Post GST, the blood rates has increased from Rs 1050 to Rs 1250. After the announcement of the rise in the prices of blood related supplies, Rajasthan State Blood Transfusion Council has issued notification that they are going to increase the prices from 1st January 2018. Additionally, some of the blood banks in the state have started charging higher prices.
Earlier No GST rates were charged on the blood collecting bag, which has now been brought under the ambit of GST and is being levied with 12.5 percent GST. After the implementation of GST, blood-related supplies are brought under the new indirect tax system. Due to the imposition of GST, it has increased the prices of blood by Rs 200.
Blood Rates and Blood Red Cells increased from Rs 1050 to Rs 1250 respectively. 12 percent GST is being charged on blood carry bags, it was exempted under previous tax regime.
The government is charging 12 percent GST rates on Platelet Carry Bag. HB Kit being charged 18 percent GST rates, earlier it was 5.5 percent. 18 percent GST Rates being levied on Glass slide, earlier it was 14 percent. Test Tab being charged 18 percent GST rates, earlier it was 14.5 percent.12 percent GST being levying on tracer tape, earlier it was 5.5 percent. Banded being charged 12 percent tax rates under GST, earlier it was 5.5 percent.
Fact Figures About Blood Banks
A total of 89 blood banks are available in the state. 44 government blood banks are available in the state. 45- non-government blood banks are available in the state. Every year 56 lakhs check-ups done in SMS Hospitals. 13 thousand checkups take place per day in the SMS Hospital. 3000 blood donation camps are organized every year in the state. Every year 6 lakh units of blood are collected from the blood donation camps.
We have registered a Pvt Ltd Company with a group of Doctors as Directors. These doctors will provide Healthcare services to Hospitals and do the billing from their Co., later they will get paid as Professional fees from the Co., IS RCM GST APPLICABLE IN THIS CASE? If RCM is applicable, the company doesn`t have any taxable supplies (as the Healthcare Services are exempt from GST). So would credit lapse or can we claim a refund. Please explain in deeper detail. Thanks in advance.
Can you explain GST implication on Covid infrastructure services provided by Private co to Municipal corportation or local authority
Kindly note private co is into the business of Event management
Covid Related services are exempted from GST for more details kindly contact to GST practitioner
Thanks for posting such a good information
A senior doctor privately teaching other junior doctors (specifically dental transplant), covered under healthcare services and whether exempted or not?
No, it will not be exempted.
I AM PROVIDING MEDICAL STAFF/DOCTOR TO HEALTH CENTRES OF INDUSTRIES. WILL I HAVE TO PAY GST?
KINDLY REPLY.
Yes, you have to pay GST.
Is GST applicable for Medical Tourism? In other words, Medical tourism can be referred to as (Healthcare service provider or Healthcare Facilitator)
We refer/bring patients to accredited hospitals in India for which the Hospital pays us the commission. What would be the % of GST imposed on us? Please give me a clarity of GST implications on this.
Heath care services include transportation of the patient to and from the clinical establishment and the same is covered under exemption list. So in case of transportation services of are provided by you the same shall be exempt but if a commission is charged by you only for referring patients same shall be taxable @ 18%.
There is one Charitable Trust and is registered under Bombay Public Trust Act No.XXXIX of 1950. The said charitable trust is running i) Public Hospital, ii) Physiotherapy College, iii) Nursing School & Hostel & iv) paramedical Section.
My question is in the light of notification No.12/2017-Central Tax (rate) date 14th NOV.2017 how to determine the exempted & taxable services of the said Charitable Trust. As per the above notification Sr.No.1, Chapter-99 Services by an entity registered under Sec. 12AA of the Income Tax Act,1961(43 of 1961) by way of charitable activities are exempted without any condition. and Sr.No.73 & 74 heading-9993 services by way preservation of the stem cell or any other service in relation to such preservation, and Healthcare services by the clinical establishment, an authorized medical practitioner or paramedics.
GST is applicable for providing outsource nursing service for hospitals.
As it will be considered as manpower supply service and will attract GST.
The In-patient includes the various surgeries conducted on the patient, charges for room rent, consultancy charges, food & beverages, bed charges, operation theater rent, equipment charges, Doctor fees, pharmacy consumed are exempted from GST as per SR No 82: Healthcare services by a Clinical Establishment, an authorized medical practitioner or paramedics. But as per your article, all these services are not exempted from GST, Could you please clear this?
SIR, I HAVE PURCHASED A 500GMS OF HORLICKS JAR TODAY FOR RS.240.00.I WAS SHOCKED THE SAME MRP COLLECTED BY TRADER EVEN THOUGH THE TAX RATE COMES DOWN FROM 28% TO 18%.CAN I ASK THE TRADER TO REFUND THE REDUCED TAX DIFFERENCE?
GST is already included in the MRP. In case of reduced tax rates, businesses will have to paste new stickers for the new MRP. In case the same MRP is charged before and after reduction in rates then you may ask the businesses to reduce the MRP’s.
Dear Sir,
Aren’t healthcare services exempt? Like you have mentioned Dialysis can cost 300 extra in taxes, won’t this be wrong?
Are services provided as part of medicare for ex food supply, manpower supply/pest control exempted from GST?
No
Is home healthcare services ( such as sending trained nurses for services at home ) exempt from GST as they come under healthcare services?
What about the GST rate on hospital rooms. Most of the private hospitals are earning a great deal by providing accommodation to the patients. Are Hospitals being exempted coz most of them are being owned by the politicians.
a patient is admitted to hospital on 20th June 2016 and discharged on 2nd July 2017. now will he charged on GST as invoice is raised on 2nd july 2017 or two separate bills raised one before GST and one post.
Scenario II
If advance is collected in the above case, how is the taxation done on final discharge bill/
Hospitals are exempt under GST
What will be the impact on hospitals / healthcare service provider. Are they totally exempted under GST ?
Is GST applicable on medicines used for indoor patients ?
Kindly clarify urgently.
Healthcare service are exempt. Medicines are liable to GST, hence taxable @ 5%
In above article, you have stated that room rent will be taxable. is it so even if a patient is admitted in the hospital
GST impact on hospital is going to be rise in cost. Many Consumables are placed in 18% slab. Simple example is Oxygen IP for medical application was in 5%/ VAT slab, excise was exempted. In GST regime, the tax slab applicable on Oxygen is 18%. Similarly, many equipment which were in exemption slab, will be now chargeable under 5-18% GST.
Healthcare services provided by Individual practitioner/ clinics having T/o upto 20 Lacs is exempted. Rest all hospitals with higher Turnover are covered, so far.
Healthcare Services are exempted from GST. So, how does it apply to hospitals with higher turnover. Do you have any notification in this regard clarifying the matter.
Again, medicines & surgical consumables used during surgery are not sale, so, how does it attract GST. Is there any clarification by GST council on the matter. Kindly update on the issue.
Tysm for this information. It was really very helpful for me.??