Exceptions related to Health Care [ Entry no. 74 & 74A ] - GST Ready Reckoner - GST

Exemption Entry No. 74 Services by way of Health Care Services by way of- (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; Except , if services provided by a clinical establishment by way of providing room , other than Intensive Care Unit (ICU) /Critical Care Unit (CCU) /Intensive Cardiac Care Unit (ICCU) /Neo natal Intensive Care Unit (NICU) , having room charges exceeding Rs. 5000 per day to a person receiving health care services. (b) services provided by way of transportation of a patient in an ambulance , other than those specified in (a) above Applicability of GST on ambulance services provided to Government by private service providers under the National Health Mission (NHM) [ Circular No. 51/25/2018-GST 31st July, 2018 ] The services provided by Government and private service providers (PSPs) by way of transportation of patients in an ambulance is applicable for the purpose of GST but the said services are specifically exempt under notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 vide Sl. No. 74. service provided by private service providers (PSPs) to the State Governments by way of transportation of patients on behalf of the State Governments against consideration in the form of fee or otherwise charged from the State Government, it is clarified that the same would be exempt under- a. Sl. No. 3 of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a pure service and not a composite supply involving supply of any goods, and b. Sl. No. 3A of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a composite supply of goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the said composite supply. Definition Meaning ​​​​​Health care [ as per para 2(zg) of Notification No. 12/2017- Central Tax (Rate) ] Health care services means any service by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, 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; Clinical establishment [ as per para 2(s) of Notification No. 12/2017- Central Tax (Rate) ] clinical establishment means a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases, Authorised medical practitioner [ as per para 2(k) of Notification No. 12/2017- Central Tax (Rate) ] authorised medical practitioner means a medical practitioner registered with any of the councils of the recognised system of medicines established or recognised by law in India and includes a medical professional having the requisite qualification to practice in any recognised system of medicines in India as per any law for the time being in force; Para-medics Paramedics has not been defined in the Finance Act, 1994 However, Para 7.2.2 of Taxation of services An Education Guide dated 20.06.2012 describes Paramedics as trained health care professionals, for example nursing staff, physiotherapists, technicians, lab assistants etc. They are accountable for their services when provided independently. Services by them in a clinical establishment would be in the capacity of employee and not provided in independent capacity and would thus be considered as services by such clinical establishment. Similarly services of assisting an authorized medical professional would be considered as services by such authorized medical professional only. Recognized system of medicines in India Para 7.2.1 of Taxation of services An Education Guide dated 20.06.2012 describes In terms of the Clause (h) of section 2 of the Clinical Establishments Act, 2010, the following systems of medicines are recognized systems of medicines: Allopathy Yoga Naturopathy Ayurveda Homeopathy Siddha Unani Any other system of medicine that may be recognized by central government. Exemption entry 46 : Services by a veterinary clinic in relation to health care of animals or birds . Services by a veterinary clinic in relation to health care of animals or birds are exempt from tax. Example : Ram a Veterinarian provides services at his veterinary clinic such service is exempt. Exemption entry 74A : Services provided by rehabilitation professionals Services Provided by rehabilitation Professionals recognised under rehabilitation council of India Act 1992 by way of rehabilitation; therapy or counselling and such other activity as covered by the said Act at medical establishments, educational institutions, rehabilitation centers established by Central Government, State Government or Union territory or an entity registered under section 12AA or 12AB of the Income tax Act, 1961 . Clarifications on the Issues Related To Health Care 1. Circular No. 27 / 01 / 2018 -GST dated 04/01/2018 clarifies Subject Issues Clarification Room Rent To pateints Whether rent on rooms provided to in-patients is exempted Room rent in hospitals is exempt Note : if room rent is more than 5000 its taxable 2. Circular 32/06/2018 dated 12/02/2018 clarifies Subject Issues Clarification Hospitals hire senior doctors/ consultants/ technicians independently without any contract of such persons with the patient; and pay them consultancy charges, without there being any employer employee relationship. Will such consultancy charges be exempt from GST? Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. Retention money Hospitals charge the patients, say, ₹ 10000/- and pay to the consultants/ technicians only ₹ 7500/- and keep the balance for providing ancillary services which include nursing care, infrastructure facilities, paramedic care, emergency services, checking of temperature, weight, blood pressure etc Will GST be applicable on such money retained by the hospitals Healthcare services have been defined to mean 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 [ para 2(zg) of notification No. 12/2017-CT(Rate) ]. Therefore, hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt . Food supplied to the patients food supplied to the patients; but such food may be prepared by the canteens run by the hospitals or may be outsourced by the Hospitals from outdoor caterers . When outsourced, there should be no ambiguity that the suppliers shall charge tax as applicable and hospital will get no ITC. If hospitals have their own canteens and prepare their own food; then no ITC will be available on inputs including capital goods and in turn if they supply food to the doctors and their staff; such supplies, even when not charged, may be subjected to GST In case food prepared by the hospital Food supplied to admitted patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable . Food supplied to Non - admitted patients supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable . In case food prepared by the hospital from outdoor caterers The supplier shall charge tax as supplies and hospital will not get ITC.