LOANS

INSURANCE

INVESTMENTS

CARDS

eStore

Discover

MY OFFERS

CUSTOMER PORTAL

ABOUT US

CONTACT US

✓Minimal Documentation ✓Flexible Repayment ✓Collateral Free Loan | Apply for Business Loan Now!

In order to increase transparency in the tax system, the government of India has implemented a new tax regime known as GST in 2017. The goods and services tax (GST) is a crucial component that has the capacity to cover the country's economic base as well as its margins. GST has been implemented in all industries, including textiles, food, automobiles, clothing, etc. And, just like other industries, the healthcare business is no exception. To procure healthcare services, you are now required to pay GST on healthcare services in addition to your bills. Furthermore, India's pharmaceutical industry has become the third biggest in terms of volume. 

Key Highlights of GST Rate on Health Care Services 

The healthcare industry has been affected by the new tax system in multiple ways. Here are a few key points about health care services under GST which will give you more information. 

 

  • According to the Authority for Advance Ruling of Andhra Pradesh, the COVID-19 immunisation delivered through hospitals is subject to the 5% GST rate.

  • As per the new rule, hospitals are required to tax room rent (excluding ICU).

Patients renting rooms amounting ₹5000 per day are taxed at 5% without ITC up to the amount invoiced for the room. 

  • According to the Maharashtra GST AAR's (Authority of Advance Ruling) most recent decision, which favoured Jyoti Ceramic Industries, prosthetic teeth, crowns, and bridges are GST exempt health care services. 

GST Rate for Hospital Rooms

Here’s a closer look at applicable GST on hospitals. 

Room Rent

Applicable GST

Below ₹1,000

0%

Between ₹1,000 to ₹2,499

12%

Between ₹2,500 to ₹7,499

18%

Above ₹7,500

28%

 

GST Rate for Healthcare Items

As the majority of individuals deal with various medical issues, health care products have become a part of our daily lives. And our demanding daily schedule is the cause of this. Hence, to keep yourself fit, buying health care products has become a necessity, and as a purchaser of health care items, you must be aware of the applicable GST. 

Here are the details about GST on health care products. 

Product

Applicable GST

Contraceptives

0%

Human blood 

0%

Insulin

5%

Animal or human blood vaccines 

5%

Hepatitis diagnostic kits 

5%

Desferrioxamine deferiprone or injection 

5%

Oral rehydration salts

5%

Cyclosporin

5%

Medicines

5%

Ayurvedic medicines, Anaesthetics, Sterile suture, Potassium Iodate, Iodine, Steam, Medicinal grade hydrogen peroxide, Glands, and other organs for organo-therapeutic use, Homoeopathic siddha or biochemical systems medicaments

12%

Surgical products

12%

Disinfectants, Tampons

18%

Wheelchairs

18%

Hot water bags

28%

Wing scale

28%

 

GST Exemption on Healthcare Services

In the list of GST imposed health care services, there are a few services which are not liable for GST. Below are the details about the same.

  •  Stem cell storage services are offered by cord blood banks, as well as any other services related to such preservation.

  • Services provided by a veterinary hospital for the treatment of animals or birds.

  • Ambulance-related services provided to the victim by a third party.

  • Treatments and procedures, such as plastic surgery. 

  • Drugs and medications used during therapy, hospital amenities such lodging, food, nursing, etc.

  • Services associated with blood bank sourcing.

  • Treatment provided by Yoga centres.

  • Treatment provided to dogs.

Impact of GST on Healthcare Industry

The GST on health care business has negatively impacted the industry and other statutes and regulations. Since the tax levies are so high, it appears that the GST has afflicted the health care business more than it has benefited it.

Here are the details about the impact of GST on health services. 

  • The cost of a variety of medical devices that are required for a daily living has increased due to the GST. For example, the cost of dialysis for renal patients has doubled as hospitals now pay 12% tax on items including tubing, catheters, dialysis machines, needles, plasma filters, and fluid that formerly fell within the 5% tax bracket.

  • Other frequently used medical types of equipment have also increased in price, such as the lead valve of a pacemaker, which is liable to an 18% tax, and CRT-ICDs, which are obligated to a 12% tax, valuing ₹15,000 to ₹20,000 more for a pacemaker and ₹40,000 more for a CRT-ICD.

  • GST rates of up to 12% are applied to blood-related supplies. The price of blood has gone up after the GST, from ₹1,050 to ₹1,250. Following the announcement of the price increase for blood-related commodities, several of the state's blood banks implemented the new rule. 

  • Previously no GST rates were paid on the blood collection kit, which has now been placed within the scope of GST and is liable to a 12.5% GST assessed. Following the establishment of GST, blood-related supplies are now obligated to the new indirect tax regime. The installation of GST has resulted in a ₹200 rise in blood pricing.

  • HB Kit is now liable to a GST rate of 18%; previously, it was 5.5%. 

  • The GST rate for glass slides has increased from 14% to 18%. 

  • GST rates are now 18% for the test kits, compared to 14.50% previously. 

  • Tracer tape is now subject to a 12% GST tax; previously, it was only 5.5%.

  • Under the new tax regime, bands are now subject to a 12% tax rate; previously, it was 5.5%.

Conclusion

There is a saying that 'Health is Wealth,' which suggests that when a person's health is excellent, everything else falls into place. Every new change brings with it both positive and negative effects and GST has impacted the healthcare industry in both ways. GST has been implemented to eliminate multiple types of taxes, including service tax, duty tax, and so on and bring uniformity as well as transparency to the tax system. 

Over the course of this article, various things have been discussed, including GST on health care services, products, GST exempted items, and the impact of the new tax regime. All these are important aspects that will aid you in understanding the change that occurred due to this new tax system.