Understanding GST for Doctors and Medical Services

GST Compliance for Doctors and Medical Services

The healthcare sector in India benefits from substantial relief under the Goods and Services Tax (GST) framework, as the government recognizes healthcare as an essential service. To ensure affordability and accessibility, the GST Council has introduced specific exemptions for doctors and other healthcare professionals. Under GST, healthcare services are defined as those provided by clinical establishments, authorized medical practitioners, or paramedics involved in diagnosing, treating, or caring for illnesses, injuries, deformities, abnormalities, or pregnancy-related conditions.

However, there are certain situations where GST applies to doctors. These include offering non-medical services, selling medical products, or surpassing the income threshold set by the government. Below is a detailed breakdown of these scenarios:

• Non-Medical Consultations: If a doctor provides services unrelated to medical practice, such as conducting workshops, delivering lectures, or offering consultancy to businesses, these activities fall under GST compliance for doctors.
• Sale of Medical Products: Promoting or selling products like supplements, medicines, or other related items may attract GST, as such activities are not classified as healthcare services.
• Income Threshold: Doctors earning less than ₹20 lakh annually (or ₹10 lakh in specially categorized states) are exempt from GST compliance. However, those exceeding this threshold must adhere to GST regulations.

These provisions aim to balance the need for accessible healthcare with the requirements of a structured tax system.

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Applicability of the GST in Healthcare Services

Here is how GST is applicable to doctors and medical services:

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Steps for GST Compliance for Doctors

Here’s a straightforward guide to assist doctors in navigating GST compliance:

• GST Registration: Doctors offering taxable services and earning above the specified income threshold must register for GST. This process can be completed online via the GST portal.
• Issuing Tax Invoices: For services that are taxable, doctors must issue GST-compliant invoices. These invoices should include details such as the doctor’s name, physical address, GSTIN (GST Identification Number), a description of the services provided, the applicable GST rate and amount, and the total invoice value.
• Record-Keeping: It’s essential for doctors to maintain accurate records of income, expenses, and invoices to claim GST credits. Special attention should be given to documenting both exempted and taxable services to ensure compliance.
• Filing GST Returns: Doctors registered under GST are required to file regular returns, including:
  • GSTR-1: This return details outward supplies, i.e., taxable services or products provided to customers in other states or countries.
  • GSTR-3B: This is a summary return that includes details of sales, purchases, and taxes paid. Failure to file GSTR-3B on time may result in penalties or even suspension of GST registration.
• Input Tax Credit (ITC): Doctors providing taxable supplies can claim ITC on inputs such as medical equipment, furniture, and other supplies used in their practice. However, ITC cannot be claimed for inputs related to exempt supplies.

By following these steps, doctors can ensure they remain compliant with GST regulations while managing their professional responsibilities effectively.

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GST Exemptions for Doctors

Below is a list of services that are exempt from GST compliance for doctors:

• Consultation and Treatment Services: Services related to outpatient care, such as consultations with general practitioners or specialists, are exempt from GST. This includes diagnostic advice, medical opinions, and therapeutic treatments.
• Clinical Facility Services: Healthcare services provided by hospitals, clinics, or nursing homes where a doctor practices or is affiliated are also exempt from GST, provided they fall under the category of healthcare services.
• Emergency Medical Services: Critical care services, including surgeries, emergency treatments, and ambulance services, are free from GST obligations when performed by medical professionals.
• Services Under Government Schemes: Doctors providing services under government health schemes, such as the Central Government Health Scheme (CGHS) or the Ex-Servicemen Contributory Health Scheme (ECHS), are not subject to GST.
• Diagnostic and Pathological Services: Diagnostic tests, imaging services (like MRIs and CT scans), and laboratory tests conducted by doctors or healthcare facilities are exempt from GST.
• Alternative Medicine Services: Services offered by licensed practitioners of Ayurveda, Yoga, Unani, Siddha, and Homoeopathy (AYUSH) are also excluded from the GST regime.

These exemptions ensure that essential healthcare services remain accessible and affordable for the public.

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Services that are not Exempted Under the GST for Doctors

Although the majority of healthcare services are exempt from GST, some ancillary services do fall under GST compliance. These include:

• Cosmetic Surgeries: Procedures performed for aesthetic purposes, unless they are medically necessary, are subject to GST.
• Renting of Clinic Premises or Medical Equipment: If a doctor rents out clinic space or medical equipment, these transactions are liable for GST.
• Sale of Medical Products: When doctors directly sell medicines, implants, or surgical equipment, these sales attract GST.

These exceptions highlight the areas where GST compliance is required, even within the broader exemption framework for healthcare services.

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Availability of ITC for Doctors

Healthcare service providers, including doctors, are exempt from paying GST, which means they are also unable to claim any input tax credit (ITC). This has led to increased costs in certain areas, such as the imposition of a 5% GST on hospital room charges, where ITC claims are not permitted. Furthermore, hospitals operating their own waste treatment plants are required to pay a 12% GST but are still ineligible to claim ITC, adding to the financial burden on medical services. These factors have contributed to rising healthcare expenses despite the general GST exemption for healthcare providers.

If you need help understanding GST for Doctors and medical services, our tax experts are just a click away. Book Consultation with Online CAs Now!

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