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GST on medical shop in hospital

03 June 2018

Services of health services is exempt service. So whether medicines sold in medical shop owned and operated and run in hospital is also exempt?

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15 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185411 Points)
Replied 03 June 2018

No.

Medicine sold to outpatients are taxable.

But medicine consumed for inpatients, and charged under treatment package are non taxable.

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RAJA P M ("Do the Right Thing...!!!") (128101 Points)
Replied 03 June 2018

My Dear Mr Dhirajlal Rambhia Sir.,

(But medicine consumed for inpatients, and charged under treatment package are non taxable...) But, Hospitals give separate bills for medicines, Rooms, any other like operation things...

Why it's not taxable...? &
Which condition...?
Can you explain please...

Vinod Babu (24196 Points)
Replied 03 June 2018

GST not applicable on health care service and diagnostic service provided by hospitals and doctors. GST applicable on sale of medicines.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185411 Points)
Replied 03 June 2018

Health care services provided by a clinical establishment, an authorised medical practitioner or para-medics are exempt. [Sl. No. 74 of notification No. 12/2017- CT(Rate) dated 28.06.2017 as amended refers]. (1) Services provided by senior doctors/ consultants/ technicians hired by the hospitals, whether employees or not, are healthcare services which are exempt. (2) Healthcare services have been defined to mean 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[para 2(zg) of notification No. 12/2017- CT(Rate)]. Therefore, hospitals also provide healthcare services. The entire amount charged by them from the patients including the retention money and the fee/payments made to the doctors etc., is towards the healthcare services provided by the hospitals to the patients and is exempt. (3) Food supplied to the in-patients as advised by the doctor/nutritionists is a part of composite supply of healthcare and not separately taxable. Other supplies of food by a hospital to patients (not admitted) or their attendants or visitors are taxable.

From ::: Circulars-2018/circularno-32-cgst.

Q . Whether rent on rooms provided to inpatients is exempted? If liable to tax, please mention the entry of CGST Notification 11/2017-CT(Rate)

Ans: Room rent in hospitals is exempt.

From:: htdocs-cbec/gst/om-clarification

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (185411 Points)
Replied 03 June 2018

If medicines etc. are purchased for resale then ITC is available and sale would attract tax.

But when medicines are consumed during treatment of inpatients, & if they are not separately billed, they will fall under composite supply under 'healthcare service' & hence exempted.

But practically, hospitals are not interested to supply the same under healthcare bundle and loose ITC benefit. They bill it separately, charge GST and earn additional income against ITC, which otherwise remain unutilized !!

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Pankaj Rawat (GST Practitioner) (55057 Points)
Replied 03 June 2018

Exempted As per Notification 12/2017 CT (rate), under S.no. 74, heading 9993

Service Tax Exemptions to be continued in GST as decided by GST Council”: (i) Health care services by a clinical establishment, an authorised medical practitioner or para-medics; (ii) Services provided by way of transportation of a patient in an ambulance, other than those specified in (i) above; In view of this, it is clear that health care services by hospitals and doctors are exempt from the GST. Please mark the word “services”. But, if a doctor or hospital is also providing medicines to the patients, then such medicines would not be covered within the word “services” but would rather be covered under “goods”. Now, for medicines as goods, GST is applicable generally at the rate of 5%. applicable on such medicines which are supplied by a doctor or a hospital to their patients, if the gross value of such supplies is above the exempted threshold value. As regards various types of medical tests (such as pathological tests) which are conducted in the hospital or by a doctor, they are also in the form of “services” and not “goods”. There is no separate category shown for such medical tests. Therefore, they can be included within the above health care services provided by doctors and hospitals under Sr. No. 82, which is exempted from GST. Therefore, I think there would be no GST on such medical tests conducted by doctors and Service Tax Exemptions to be continued in GST as decided by GST Council”:

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Vinod Babu (24196 Points)
Replied 03 June 2018

Thanks for Brief explanation...

saurav (Tax practicner) (117 Points)
Replied 03 June 2018

gst is applicable on medicine , bed charges , room charges etc

UMESH YADAV (Account Executive) (28 Points)
Replied 04 June 2018

what is sample basis medicine required ewaybill

Vinod Babu (24196 Points)
Replied 04 June 2018

Delivery challan needed for generating E-way bill

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Prasad Rao (CHARTERED ACCOUNTANT) (73 Points)
Replied 19 November 2018

If medical store is treated as a branch\ additional place of business of a hospital, whtether gst paid of machinery for hospital like x-ray,sonography etc credit can be utilised in medical store of of the hospital?