Services by way of health care services by a clinical establishment, an authorised medical practitioner or paramedics are exempt.
## Room Charges Rule — Important Carve-out
Type of Room
Room Charges Exemption
ICU, CCU, ICCU, NICU
No limit — Always exempt
Other rooms (general/private wards)
Exempt only if room rent ≤ ₹5,000 per day
If the room rent in a non-ICU room exceeds ₹5,000 per day → 5% GST without ITC on the room charges (treatment charges remain exempt).
## Transportation of Patient — Ambulance
Transportation of a patient in an ambulance is exempt (irrespective of who provides it).
## Cosmetic / Plastic Surgery — Two Tests
The purpose decides taxability:
Hair transplant / Cosmetic / Plastic surgery to enhance looks (e.g. nose job for beauty) → Taxable
Reconstructive surgery to fix a body part / restore function (e.g. burns reconstruction, congenital defect repair) → Exempt
## Other Important Points
Item
Status
Faith healing / counselling
Exempt
Out-patient services (OPD)
Exempt
Retention money kept by hospital from doctor's fee
Not taxable (it is part of healthcare)
Assisted Reproductive Technology (ART) / IVF
Exempt
Services by recognised rehabilitation professionals
Exempt
Veterinary services
Exempt
Worked example
### Example 1
Example 1: A hospital charges ₹8,000 per day for a deluxe private room. Treatment charges ₹2 lakhs. Answer: Treatment charges fully exempt. Room rent > ₹5,000/day → 5% GST without ITC on room charges (₹8,000/day).
### Example 2
Example 2: Mr. X is treated in the ICU at ₹15,000 per day. Answer: ICU has no room rent limit → fully exempt.
### Example 3
Example 3: A celebrity undergoes a nose job purely for aesthetic enhancement. Answer: Cosmetic surgery to enhance looks → Taxable.
### Example 4
Example 4: A burn victim undergoes reconstructive plastic surgery to restore facial function. Answer: Reconstructive surgery to fix body part → Exempt.
### Example 5
Example 5: A hospital pays doctors ₹80,000 and retains ₹20,000 as retention money out of patient's ₹1,00,000 fee. Answer: The entire ₹1 lakh including retention money is part of healthcare services — exempt.
⚠️ Common exam mistakes
Treating ICU room rent above ₹5,000/day as taxable — there is NO limit for ICU/CCU/ICCU/NICU.
Assuming all plastic surgery is taxable — reconstructive surgery to restore body function is EXEMPT.
Treating ambulance services as taxable transport — they are specifically exempt.
Charging GST on the entire bill when only the room rent exceeds ₹5,000 — only the room rent portion attracts 5% GST without ITC; treatment remains exempt.
Treating retention money kept by hospital as a separate taxable supply — it is part of the exempt healthcare service.
Bare-Act text Entry 74 (read with Notification 03/2022-CT(R) dated 13.07.2022) · Notification No. 12/2017-CT(R) dated 28.06.2017 · click to expand
Services by way of — (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics; (b) services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above. 'Health care services' means 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.