GST on Healthcare & Pharma — Services Exempt, Medicines 5-12%, Devices 12%

NO GST on healthcare services provided by a clinical establishment (hospital, nursing home, clinic). This covers: (1) Doctor consultation. (2) Surgery/operation charges. (3) Room rent (general ward, semi-private, private, ICU — ALL exempt). (4) Medicines consumed during treatment (administered in hospital). (5) Diagnostic tests (pathology, radiology, scans). (6) Nursing charges. (7) OT charges. (8) Physiotherapy. HOWEVER: (a) Medicines PURCHASED from hospital pharmacy (take-home): 12% GST (retail sale of goods, not service). (b) Food from hospital canteen for visitors: 5% GST. (c) Hospital ambulance for commercial hire: debated. (d) Room upgrade as 'luxury' — still exempt if part of healthcare. The exemption is for the SERVICE of healthcare — not goods sold retail by hospital.

Health insurance premiums attract 18% GST — one of the most criticized GST rates. The 55th GST Council (December 2024) discussed the Group of Ministers (GoM) recommendation: (1) Term life insurance: exempt for individual policies. (2) Health insurance for seniors (>60 years): exempt (or 5% — under consideration). (3) Health insurance premium ≤₹5 lakh sum insured: possibly 5%. (4) Health insurance premium >₹5 lakh: continue at 18%. No final decision yet — deferred for further analysis. Industry argument: 18% GST discourages health insurance penetration (currently only 3-4% of Indians have private health insurance). Government concern: insurance constitutes ₹2,400 Cr+ in GST revenue — reduction has fiscal impact. Employee group health insurance (paid by employer): 18% GST, ITC available to employer.

Classification is based on HSN 3003 (medicaments not in dosage form) at 12% and HSN 3004 (medicaments in measured doses/retail packing) at 12%. BUT specific exemptions/concessions: (1) NLEM drugs (National List of Essential Medicines — ~384 drugs): 5% if specifically notified. (2) Life-saving drugs: anti-cancer, anti-HIV/AIDS (ARV), anti-TB, anti-malarial, anti-diabetic insulin → 5%. (3) Vaccines (all): 5%. (4) Oral Rehydration Salts: 5%. (5) Blood/blood components: exempt. (6) Human blood for therapeutic use: exempt. General branded formulations (Crocin, Dolo, Augmentin): 12%. The 5% vs 12% distinction is NOT based on necessity perception alone — it's based on specific notification entries. Many 'essential' drugs are still at 12% because they weren't specifically notified for 5%.

Generally NO — because healthcare services are EXEMPT from GST, and exempt supplies don't count toward the ₹20 lakh registration threshold. A doctor providing only clinical/medical services (consultation, treatment) has 100% exempt turnover → no registration required regardless of income. HOWEVER, registration becomes necessary if: (1) Doctor sells medicines from attached pharmacy (retail sale — taxable supply). If pharmacy sales >₹20 lakh: register. (2) Doctor provides cosmetic procedures (taxable at 18%). (3) Doctor provides services inter-state (e.g., telemedicine to patients in other states — exempt but may need registration for tracking). (4) Doctor rents commercial property (receiving RCM supply). In practice: Most solo practitioners don't register. Multi-specialty hospitals with pharmacy + canteen + parking: usually register due to taxable components.