The tax reforms have made the taxation structure easier in India by replacing numerous taxes into the Goods and Service Tax regime in India, but the controversies are not far behind, and many questions may have arisen in many fields, such as whether GST applies to the healthcare sector and the GST compliance for doctors. Since doctors play a significant role towards public health, they enjoy certain exemptions that are available with respect to the GST compliance for doctors. This blog provides a clear overview of GST for doctors in India, highlighting the key exemptions and making them easy to understand.
GST Compliance for Doctors and Healthcare Services
The healthcare sector in India enjoys significant relief under GST. This is mainly because the government considers the provision of healthcare as a necessity.
The GST Council has some exemptions for doctors and some other healthcare professionals to make them cheaper and easily accessible. Under the GST, healthcare services are referred to as services provided by a clinical establishment, authorized medical practitioner, or paramedic involved in diagnosis and treatment or care for illness, injuries, deformity, abnormality, or pregnancy.
There are certain scenarios where GST for doctors does apply, such as when they provide non-medical services, sell medical products, or exceed the prescribed income threshold. Let’s look at each of them in detail.
- Consultation for Non-Medical Purposes: If a doctor offers non-medical services like conducting workshops, offering consultancy services to a company, or taking lectures, the services will attract GST compliance for doctors.
- Sale of Medical Products: Advertising any product, such as supplements, medicines, or any other related product, could attract GST compliance for doctors since it is not classified under healthcare services.
- Threshold Exemption: The doctors who do not get paid more than₹20 lakh (₹10 lakh for specially categorized states) per annum do not come under GST compliance for doctors.
Steps for GST Compliance for Doctors
Here’s a simple guide to help doctors with GST compliance:
- GST Registration: Doctors whose services are considered taxable and who earn above the prescribed limit are bound to register for GST. This can be done through the GST portal.
- Issuing Tax Invoices: For taxable services, doctors are required to provide GST-enabled bills only. These should include the name of the doctor, the physical address and the GSTIN number, a description of the services offered, the GST rate and amount, and the total value.
- Maintenance of Records: Maintaining the records of income, expenses, and invoices for GST credit of amount is the best practice for GST registration. Doctors should particularly pay attention to documentation for the exempted services as well as the taxable services.
- Filing GST Returns: Doctors registered under GST are required to file regular returns, including:
GSTR-1: GSTR-1, or outward supplies, refers to the taxable services or products that are supplied to customers located in another state or country.
GSTR-3B: GSTR-3B involves showing the summary of sales, purchases, and taxes paid, failing which may lead to penalties or even suspension of GST registration. - Input Tax Credit (ITC): If a doctor carries out taxable supplies, he can claim ITC on inputs including equipment, furniture, and any other supplies used in the course of his profession. However, ITC cannot be claimed for the exempt supply.
GST Exemptions for Doctors
Here is a list of services exempted from GST compliance for doctors:
- The Consultation and Treatment Services: this is mainly associated with access to care in OPD settings. Consultations with doctors, including general practitioners and specialists, are not taxed under the GST regime. This includes diagnostic advice, seeking medical opinion, and therapies.
- Services Offered by Clinical Facilities: Hospitals and clinic services or nursing homes where a doctor operates or is affiliated with are exempt from the GST regime if the services come under healthcare services.
- Emergency Medical Services: Emergency treatments such as surgeries, critical care, or ambulance services provided by medical practitioners are free from GST obligations.
- Services Offered to Government Schemes: Doctors who provide their services to schemes including the central government health scheme or the ex-servicemen contributory health scheme are not in the purview of GST.
- Diagnostic and Pathological Services: Any diagnostic tests or imaging services like MRIs, CT scans, and lab tests conducted by doctors or healthcare units do not fall under the GST regime.
- Alternative Medicine Services: Services undertaken by Ayurveda, Yoga, Unani, Siddha, and Homoeopathy (AYUSH) practitioners, having obtained a legitimate license, are exempt from the GST regime.
Services Not Exempt under the GST for Doctors
While most healthcare services are exempt, certain ancillary services are subject to GST compliance. These include:
- Cosmetic surgeries, unless medically required.
- Renting of clinic premises or medical equipment.
- Sale of medicines, implants, or surgical equipment when directly sold by doctors.
Applicability of the GST Regime in Healthcare Services
Service Type | GST Compliance for Doctors? | Rate of Tax |
Consultation and Treatment | No | Exempted |
Diagnostic and Pathological Services | No | Exempted |
Emergency Services | No | Exempted |
Non-Medical Cosmetic Surgeries | Yes | 18% |
Sale of Medicines or Equipment | Yes | 5-12% |
AYUSH: Applicability of GST Regime
AYUSH Practice | GST Compliance for Doctors? | Rate of Tax |
Ayurveda, Yoga, Unani | No | Exempted |
Siddha and Homeopathy | No | Exempted |
Non-authorised practitioners | Yes | 18% |
See Also: Best Insurance For Doctors In India: A Critical Investment
Conclusion
The exemption of GST for doctors and healthcare services in India reflects that the government considers healthcare a necessity and of utmost importance rather than a luxury.
These exemptions have been introduced to reduce tax burdens that could have a negative contribution to patient care outcomes and let the doctors, clinical establishments, and AYUSH practitioners give their complete attention to the advancement of patient care services and medical operations without any extra pressure of high taxes and the cost of services to remain reasonable.
Knowing about these exemptions enables the practitioners in the health care sector to avoid legal implications regarding taxation and also gives the public an idea about these exemptions in order to avoid and be aware of the fraudulent services.
This blog serves as a simple guide to help doctors understand the key aspects of GST for doctors and how they can navigate the complex processes. If you are a doctor, then contact an authorised legal practitioner to get assistance with how effectively you can utilise these exemptions.
