GST Healthcare
Hospital + Pharma + Insurance

HEALTHCARE GST EXEMPTION (Notification 12/2017): (1) HOSPITAL + CLINIC SERVICES by authorized medical practitioners: 100% EXEMPT. (2) DIAGNOSTIC + LAB services: EXEMPT. (3) AMBULANCE services: EXEMPT. (4) BLOOD BANK services: EXEMPT. (5) MEDICAL EDUCATION services: EXEMPT. NOT EXEMPT: (1) COSMETIC + AESTHETIC surgery: 18%. (2) HOSPITAL ROOM > ₹5K/day: 5% GST (Government 2022 amendment). (3) HOSPITAL ROOM with hotel-like amenities: separate rate.

STRATEGIC: standard medical care unaffected by GST.

PHARMA GST RATES — SIMPLIFIED ON 22 SEPTEMBER 2025: all drugs and medicines now attract a concessional 5%, except the specified few at nil. The old 5% / 12% / 18% split by category is gone along with the 12% slab. (1) LIFE-SAVING DRUGS (cancer, HIV, organ transplant): 5% or nil where specified. (2) ESSENTIAL MEDICINES: 5%. (3) ANCILLARY + OTC drugs: 5%. (4) AYURVEDIC + HOMEOPATHIC medicines: 5%. (5) VETERINARY medicines: 5%. (6) HOMEOPATHIC TINCTURES: 5%.

EXAMPLES: (a) Cancer drugs: 5% or nil. (b) Common antibiotics: 5%. (c) Pain relief OTC: 5%. (d) Multivitamins: 5% where classified as medicament — a plain food supplement is not a medicine and is taxed as the supplement it is. ITC available for hospitals' standard medical purchases.

CONSULT pharma GST CA for compounded preparations.

HEALTH INSURANCE — CHANGED ON 22 SEPTEMBER 2025: (1) INDIVIDUAL health insurance policies, including family floater and senior citizen plans, are now fully EXEMPT from GST. They previously carried 18%.

Individual LIFE policies (term, ULIP, endowment) are likewise exempt. GROUP and employer-provided policies are NOT covered by the exemption and remain at 18%. (2) For INDIVIDUALS: nothing to claim — there is no GST on the premium to begin with. (3) For BUSINESSES (employer-provided): NO ITC explicit since 2017 (Section 17(5)(b)). (4) GROUP MEDIPRIME insurance: same. (5) CLAIM SETTLEMENTS: GST-free.

STRATEGIC: (1) BUSINESSES can't claim ITC on employee insurance — built into expense. (2) INDIVIDUALS: an individual policy now carries no GST at all — on a ₹25,000 premium that is ₹4,500 a year saved versus the old 18% cost. (3) 80D DEDUCTION for individual + family: ₹25K (self+family) + ₹50K (parents senior). CRITICAL: 18% GST significant on premiums — factor in coverage decisions.

JULY 2022 BUDGET CHANGE: (1) HOSPITAL ROOM RENT > ₹5,000 PER DAY (excluding ICU): 5% GST. (2) ICU rooms: ALWAYS EXEMPT (any rate). (3) NON-MEDICAL services bundled with room (food, laundry): GST applicable. (4) PRIVATE WARDS in premium hospitals affected. EXAMPLE: ₹8K/day room for 5 days = ₹40K + 5% GST = ₹42K total.

STRATEGIC: (1) ICU stays unaffected. (2) Lower-cost rooms < ₹5K/day exempt. (3) PREMIUM hospital choice: factor GST + costs. (4) INSURANCE coverage may need top-up for GST. CRITICAL change for high-end medical care.

HEALTHCARE GST STRATEGY: (1) STANDARD MEDICAL CARE: 100% exempt — no cost impact. (2) COSMETIC SURGERY: 18% GST + budget upfront. (3) PREMIUM HOSPITAL ROOMS > ₹5K/day: 5% GST factored in. (4) ICU stays: ALWAYS exempt. (5) LIFE-SAVING DRUGS: low 5% GST. (6) OTC + multivitamins: 18% — buy bulk if regular use. (7) HOSPITAL ITC: most exempt activities — limited ITC eligibility. (8) MEDICAL EQUIPMENT purchase: 5% GST from 22 September 2025 — the 5% rate applies to all medical, surgical, dental and veterinary devices, instruments and apparatus other than those specifically exempt (it was 12%) + check ITC for business hospitals. (9) AYURVEDIC + NATUROPATHIC: separate rates. (10) HEALTH INSURANCE: individual policies EXEMPT since 22 September 2025 (group/employer policies still 18% premium) — factor in cost. (11) MEDICAL TOURISM India: domestic GST applies to foreign patients. CONSULT pharma + hospital GST CA for compliance.