FAQ on Health Services & Family Welfare dated 08-08-2017 - GST Frequently Asked Questions (FAQs) - GST

Q. 1 What is meant by health care services under GST? Ans. Under the ambit of GST, healthcare services may refer to any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, injury or trauma. Q. 2 In what manner is the GST going to impact the health and family welfare sector? Ans. Healthcare sector has been exempted from GST as the government has accorded healthcare the due importance and impetus that this sector needs to accelerate progress towards achieving the national goals in our endeavour towards achieving health for all as per the National Health Policy 2017 (NHP) and the Sustainable Development Goals (SDGs), to both of which India is committed. This will contribute to the process of the transformation of India, its people and the economy. Overall the processes under GST has made business easy and would lead to decrease in cost of medicines, diagnostic and devices. Q. 3 How are health care services to be impacted by GST? Ans. Simplification of the processes and overall reduction in entire value chain in the production of the manufacturing of drugs and medicines, medical devices would lead to better healthcare services in the long run. Under GST, duty charged on the import of technical machinery and equipment needed by the health sector would be allowed as a credit. This benefit of the overall reduction in the cost of technology is due to implementation of GST. Q. 4 How will GST impact life-saving drugs and equipment? Ans. Life-saving drugs, healthcare services, and medical devices would continue to be tax-free under GST. Hence, the prices will not be impacted in the short run. However, ease of processes and overall reduction in the magnitude of taxes throughout the value chain of manufacturing of drugs medicines and medical devices will make the cost cheaper in the long run. Q. 5 What are the services that are likely to face increased taxation due to GST? Ans. Dialysis (5% to 12%), pacemaker (5.5% to 12-18%), support devices in orthopaedics (5% to 12%) and all cancers except blood cancer (5% to 7-12%) are the services that may face increased taxation due to GST. Action has already been initiated by the Ministry to ensure that the cost of all vital life-saving health services remains the lowest possible so as to ensure that they are accessible, affordable and available to all citizens of the country. Q. 6 Is medical tourism likely to be affected by GST? Ans. With the rollout of GST, the cost of insurance, pharmaceuticals, and international travel together with quality health care is expected to reduce which would culminate into better prospects of medical tourism in the country.