# Health Care Services – Exemption Under GST

## Relevant Entries

Entry	Service
46	Services by a veterinary clinic in relation to health care of animals or birds
74(a)	Health care services by a clinical establishment, authorised medical practitioner or para-medics
74(b)	Transportation of a patient in an ambulance (other than (a))

### Important Exclusion to Entry 74(a) – Room Rent Restriction

Health care services exemption does NOT apply to rooms (other than ICU/CCU/ICCU/NICU) with room charges exceeding Rs.5,000 per day to a person receiving health care services.

Thus:

Room charges ≤ Rs.5,000/day → Exempt
ICU/CCU/ICCU/NICU → Exempt (no monetary cap)
Other rooms > Rs.5,000/day → Taxable

## Meaning of 'Health Care Services'

Any service by way of:

Diagnosis / treatment / care for illness, injury, deformity, abnormality or pregnancy
In any recognised system of medicines in India
Includes transportation of patient to and from clinical establishment
Excludes hair transplant, cosmetic or plastic surgery
EXCEPTION: When undertaken to restore/reconstruct anatomy/functions affected due to congenital defects, developmental abnormalities, injury or trauma → covered as health care

## Recognised Systems of Medicine

Allopathy, Ayurveda, Unani, Yoga, Homeopathy, Naturopathy, Siddha
Any other system recognized by Central Government
NOT included: Reiki healing

## Clinical Establishment

Hospital, nursing home, clinic, sanatorium, or any institution offering diagnosis/treatment/care in recognised system of medicines, OR an independent diagnostic/investigative establishment.

Key clarification: Pathological labs providing diagnostic/investigative services are also clinical establishments → services are EXEMPT.

## Authorised Medical Practitioner

Medical practitioner registered with any council of recognised system of medicines established/recognised by law in India.

## Paramedics

Trained healthcare professionals (nurses, physiotherapists, technicians, lab assistants).

Services by paramedics within clinical establishment → treated as services by establishment (employer-employee).
Services in independent capacity → also exempt.

## Senior Doctors / Consultants / Technicians (Visiting / Independent)

No employer-employee relationship with hospital
No contract with patient directly
CBIC clarification: their services = health care services → EXEMPT

## Retention Money by Hospitals

If hospital charges patient Rs.10,000 and pays consultant Rs.7,500, retaining Rs.2,500 for ancillary care (nursing, paramedic, infrastructure, emergency) — the ENTIRE amount (including retention) is part of healthcare services → EXEMPT.

## Food Supplied to Patients

Recipient	Source	Treatment
In-patient	Prepared in-house	Exempt (part of healthcare)
In-patient	Outsourced canteen	Exempt to patient; canteen charges tax to hospital, hospital gets no ITC
Non-admitted patients, attendants, visitors	Any	Taxable

## Ambulance Services & National Health Mission (NHM)

Dial 108 emergency / 102 women & child ambulance services
Provided by State Govt directly OR outsourced to Private Service Providers (PSPs) who charge state
Ambulance services by SG and PSPs → Exempt under Entry 74
PSP ambulance on behalf of SG → also exempt under Entry 3 (pure service) or Entry 3A (composite supply, ≤25% goods)

## Non-Health Care Services in Clinical Establishment Premises

Renting of shops, auditoriums, advertisement displays inside hospital → TAXABLE.

## Assisted Reproductive Technology (ART) / IVF

Infertility is an abnormality → ART/IVF treatment = health care services → EXEMPT.

Worked example

### Example 1

Example 1 – Cleft Lip Surgery: Plastic surgery for cleft lip repair reconstructs body function affected by a congenital defect → falls within health care services → EXEMPT. Contrast with cosmetic plastic surgery for beautification → TAXABLE.

### Example 2

Example 2 – Palliative Care: Palliative care for terminally ill patients (at home or in clinical establishment) focuses on improving quality of life → considered health care services → EXEMPT, even though it doesn't 'cure' the disease.

### Example 3

Example 3 – Reiki Healing: Not in the list of recognised systems of medicines → NOT health care services → TAXABLE.

### Example 4

Example 4 – Hospital Room Charges: Hospital A charges Rs.6,000/day for a deluxe room and Rs.8,000/day for ICU. Treatment: Deluxe room (>Rs.5,000, not ICU) → TAXABLE. ICU → EXEMPT.

### Example 5

Example 5 – Pathology Lab: An independent pathological lab providing diagnostic services → qualifies as 'clinical establishment' → diagnostic services are EXEMPT.

### Example 6

Example 6 – Visiting Consultant Retention: Hospital charges patient Rs.10,000, pays consultant Rs.7,500, retains Rs.2,500. Entire Rs.10,000 = healthcare services → fully EXEMPT.

⚠️ Common exam mistakes

Treating diagnostic services by independent pathological labs as taxable — they are exempt as clinical establishments.
Assuming ALL room rents in hospitals are exempt — those > Rs.5,000/day (except ICU/CCU/ICCU/NICU) are TAXABLE.
Treating retention money kept by hospitals from consultant payment as taxable consideration — entire patient billing is exempt.
Treating food supplied to attendants/visitors as exempt — only in-patients qualify.
Assuming all plastic/cosmetic surgery is taxable — surgeries to restore anatomy after congenital defects/injury/trauma are exempt.
Forgetting that renting of shops/auditoriums inside hospital premises is taxable.
Treating IVF as cosmetic — IVF is exempt as health care.
Treating Reiki/other non-recognised therapies as exempt health care.

Bare-Act text Entry 46 & Entry 74 · Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017 · click to expand

Entry 74 (Notification No. 12/2017-CT(R)): Services by way of — (a) health care services by a clinical establishment, an authorised medical practitioner or para-medics: Provided that nothing in this entry shall apply to the 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.5,000 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. Entry 46: Services by a veterinary clinic in relation to health care of animals or birds.

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Health Care Services (Entry 46 & 74)

Worked example

⚠️ Common exam mistakes