GST exemption for healthcare services: what's in, what's out

Almost no clinic is fully exempt from GST, and almost none is fully taxable. Most sit in the middle, making what the law calls mixed supplies: some lines on the bill carry no tax, and some do. Knowing which is which is the whole game.

Here's the map.

The exempt side

Care is exempt. Specifically, the law exempts health care services by a clinical establishment, an authorised medical practitioner, or paramedics. In plain terms:

• Consultations and follow-ups
• Diagnosis and treatment of an illness, injury, deformity, abnormality, or pregnancy
• Procedures done to treat a condition
• Transporting a patient to and from the clinic (the ambulance ride)

Two less-obvious ones, both clarified by CBIC. When a hospital pays a visiting consultant out of what the patient was charged, the full amount billed to the patient stays exempt, including the consultant's cut. And food given to an in-patient on the doctor's or dietician's advice is treated as part of the treatment, so it's exempt too.

The taxable side

The exemption is for the care, not for everything sold around it. These attract GST:

• Retail and over-the-counter pharmacy sales. A medicine handed across the counter as a product is a supply of goods, taxed at its own rate with an HSN code. The HSN/SAC guide covers the codes.
• Cosmetic and aesthetic procedures. Hair transplant and cosmetic or plastic surgery are written out of the exemption, unless they restore or reconstruct the body after a congenital defect, an abnormality, an injury, or trauma. A purely aesthetic procedure is taxed at 5% without input tax credit (18% before 22 September 2025).
• Product sales. Spectacles, devices, supplements, anything sold as a retail item.
• Food for visitors and attendants. The in-patient's prescribed meal is exempt. Food sold to the people who came with them is not.
• Room rent above ₹5,000 a day (other than ICU), taxed at 5%.

The grey zones

A few cases genuinely sit on the fence, and they're worth a CA's eye:

• Cosmetic vs reconstructive. The same procedure can be exempt or taxable depending on why it's done. Reconstructive after an accident: exempt. The same surgery for appearance: taxable. The reason has to be on record.
• Bundled vs separate. Medicines used inside a treatment can ride along with the exempt care as a composite supply. The same medicine sold separately at the counter is taxable. The bundling is what decides it.

Why "mixed" changes your paperwork

Once you make both kinds of supply, you issue both kinds of document. A tax invoice for the taxable lines, showing the CGST/SGST or IGST split. A bill of supply for the exempt ones, showing no tax. Sometimes both on the same visit.

Mixed supplies also pull you into the registration question, because the taxable side can push you over the threshold. That's a separate decision, walked through in does a clinic need GST registration.

Common questions

Is a consultation always exempt?

Yes, as long as it's actual care. A consultation that exists only to sell an aesthetic procedure follows the aesthetic procedure, which is taxable.

We run an in-house pharmacy. Are we taxable?

The retail sales are. The care isn't. You're a mixed-supply clinic, and you bill each side on the correct document.

Does an exempt clinic still file anything?

If you're registered, yes, exempt supplies still get reported. Being exempt isn't the same as being invisible.

How Avinya Plus handles the mix

In Avinya Plus, every catalogue item carries its own tax status, so an exempt consultation and a taxable product can sit on the same bill without you sorting it by hand. Taxable lines split into CGST + SGST for same-state patients or IGST for inter-state ones; exempt lines stay clean. You print an A4 invoice or an 80mm thermal receipt at the counter.

This is general information, not tax advice. Rates and rules change, and the grey zones turn on facts specific to your clinic. Confirm your position with a chartered accountant.