GST on health services

As per Notification No.12/2017- Central tax (Rate) dated 28^th June 2017 under Sl.No.74, Services by way of-

(a) 'Health care services' by a Clinical establishment, an Authorized medical practitioner or Para-medics;

(b) Services provided by way of transportation of a patient in an ambulance, other than those specified in (a) above, are 'Exempt services' under G.S.T

Hence, we need to find out whether or not 'Health care services' covers 'Medical tests such as Complete blood count, Basic Metabolic panel, Thyroid test, Urinalysis, Hemoglobin test, X-ray, E.C.G, Kidney function test, Scanning and Other similar tests'.

Therefore to get the benefit of above notification, the following twin conditions must be satisfied,

1. All the above specified services must fall under the definition of 'Health care services' and

2. Such health care services must be provided by either "Clinical establishment" or "Authorized medical practitioner" or "Paramedics"

Condition 1

GST Act defines what 'Health care services' means under Notification No.12/2017

As per definition provided in Notification No.12/2017 - 'Health care services' means any service by way of Diagnosis or Treatment or Care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India and includes services by way of transportation of the patient to and from a clinical establishment, but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or to reconstruct anatomy or functions of body affected due to congenital defects, developmental, abnormalities, injury or trauma;

The term 'Diagnosis' has not yet been defined under G.S.T Act but the term had found its meaning in Oxford dictionary as - The identification of the nature of Illness or other problems by examination of symptoms. Since the main output/outcome of medical laboratory tests is Identification of disease or illness or other problems, it seems such services squarely falls under the definition of 'Health care services' on the ground of 'Diagnosis'

Indeed our assertion is further clarified based on the 'Classification of services' by C.B.I.C as follows

Section 9: Community, Social & Personal Services and other miscellaneous services as per 'Scheme of classification of services' under G.S.T provides for the definition of Human health services under Group 99931 as follows

Hence 'Medical Laboratory and Diagnostic-imaging services' squarely falls under the definition of Health care services

Condition. 2

Such health care services need to be provided by 'Clinical establishment" or "Authorized medical practitioner" or "Paramedics". Now, let's decide whether institution providing "Medical Laboratory and Diagnostic-imaging services" covered under the definition of "Clinical establishment" or not.

As per definition provided by Notification No.12/2017- Central tax (Rate), Clinical establishment means 'a hospital, nursing home, clinic, sanatorium or any other institution by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognized system of medicines in India, or a place established as an independent entity or a part of an establishment to carry out diagnostic or investigative services of diseases'

Since, Institution providing medical testing and other laboratory services whether as a part of a hospital or not provide services of diagnosis, it squarely falls under the definition of Clinical establishment.

Hence, Condition 2 also satisfied

Therefore, services provided by institutions providing 'Medical Laboratory and Diagnostic services' are exempt services under G.S.T

(Our assertion is further confirmed through the reading of judgement pronounced by A.A.R (G.ST) in case of In re M/s. Medi-vision Scan and Diagnostic Research Center P. Ltd. (G.S.T A.A.R Kerala)

Disclaimer: This Article is based on our personal professional opinion and it will not bind us about accuracy on any point in any manner.