A purely cosmetic procedure is taxable, not exempt like genuine medical care. Since 22 September 2025 the rate is 5%, charged without input tax credit, down from 18% before that. It's one of the very few things a clinic does that the healthcare exemption deliberately leaves out, and everything turns on one question: was it medically necessary, or was it for appearance?
The test: cosmetic or reconstructive
The definition of health care services in Notification 12/2017 specifically excludes hair transplant and cosmetic or plastic surgery. There's one carve-out: the procedure stays exempt when it's done to restore or reconstruct the body after a congenital defect, a developmental abnormality, an injury, or trauma.
So the same operation can land on either side of the line. Reconstruction after a burn or an accident is care, and it's exempt. The same surgery for looks is cosmetic, and it's taxable. The reason is what decides it, which is why the clinical indication has to be on the record.
What's taxable
Done for appearance, these carry 5% GST, levied without input tax credit:
- Hair transplant
- Aesthetic rhinoplasty and other cosmetic surgery
- Fillers and botox for cosmetic reasons
- Laser and similar procedures done purely for aesthetics
What stays exempt
- Reconstruction after trauma, burns, or cancer surgery
- Correction of a cleft palate or a congenital defect
- Any procedure to restore function rather than appearance
Dermatology is not automatically cosmetic
This trips up a lot of skin clinics. Treating a skin disease, acne, psoriasis, an infection, is healthcare, and it's exempt. Only the aesthetic work is taxable. A dermatology clinic usually runs both, exempt treatment and taxable cosmetic services, side by side. Our dermatology clinic page covers the wider workflow.
The same drug can flip too. Botox for chronic migraine is therapeutic and exempt. Botox for wrinkles is cosmetic and taxable. Same vial, different purpose.
The 5% rate comes without input tax credit
The September 2025 cut to 5% has a string attached: it's levied without input tax credit. The GST your clinic pays on the consumables, equipment, and materials that go into an aesthetic procedure is a cost you absorb, not something you can set off against the 5% you collect. The headline rate is lower than the old 18%, but you carry the input tax now. That trade changes your pricing maths, so work it through with your CA before treating the cut as a clean saving.
Common questions
Is all plastic surgery taxable?
No. Cosmetic plastic surgery for appearance is taxable. Reconstructive plastic surgery after injury or disease is exempt. The indication decides it.
How do I defend an exempt classification in an audit?
With the clinical record. If the file shows medical necessity, the exemption holds. If it reads as elective and aesthetic, expect it to be treated as taxable.
We do both cosmetic and medical dermatology. One GST treatment?
No. Bill the medical treatment as exempt and the aesthetic service as taxable at 5% (without input tax credit). They're different supplies even for the same patient on the same day.
How Avinya Plus handles it
In Avinya Plus, an aesthetic service can be tagged taxable at 5% with its SAC code while a therapeutic treatment stays exempt, all in one catalogue. The bill comes out right whether the patient is in for acne or for a cosmetic procedure, and the taxable lines split into CGST + SGST or IGST.
This is general information, not tax advice. The cosmetic-versus-reconstructive line turns on facts specific to each case. Confirm rates, ITC eligibility, and classification with a chartered accountant.
Sources
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