Regarding Service Tax Payable to Hospitals
This query is : Resolved
02 July 2011
I have undergone a surgery in april,I want to know that whether I have to pay service tax to hospital ? If yes then at which rate?
02 July 2011
service tax on hospitals are withdrawn
03 July 2011
Please give more clarifications,because hospital is demanding service tax.
20 July 2025
Here’s a clear explanation about Service Tax on Hospitals (pre-GST, around 2011):
Are hospitals liable to charge Service Tax?
Generally, no.
According to Service Tax law (pre-GST), services by a clinical establishment, an authorized medical practitioner or paramedics are exempt from service tax.
This means medical services provided by hospitals, clinics, and doctors are exempt from Service Tax.
So, the hospital should not be charging you Service Tax on medical treatment or surgeries.
Why is the hospital charging Service Tax?
Sometimes hospitals charge Service Tax on non-medical services such as:
Providing rented accommodation to patients (hospital room charges in some cases)
Providing services like ambulance, cosmetics, or health club/spa facilities
Any other non-exempt services (like canteen services for visitors, etc.)
In these cases, Service Tax may apply.
What is the official status?
Services provided by clinical establishments or medical practitioners are exempt under Notification No. 25/2012-ST dated 20 June 2012 (this notification was issued after your query but was applicable retrospectively).
Earlier, hospitals were exempted from Service Tax on medical services.
What should you do?
Ask the hospital to clarify the basis of charging Service Tax.
If it is on medical treatment/surgery, you should not be charged Service Tax.
If it is for non-medical services (like room rent, laundry, etc.), Service Tax may be applicable.
Summary:
Service type Service Tax Applicable?
Medical treatment/surgery No (Exempt)
Non-medical services (room rent, ambulance, etc.) Yes, as per applicable rate (usually 12-14%)
Are hospitals liable to charge Service Tax?
Generally, no.
According to Service Tax law (pre-GST), services by a clinical establishment, an authorized medical practitioner or paramedics are exempt from service tax.
This means medical services provided by hospitals, clinics, and doctors are exempt from Service Tax.
So, the hospital should not be charging you Service Tax on medical treatment or surgeries.
Why is the hospital charging Service Tax?
Sometimes hospitals charge Service Tax on non-medical services such as:
Providing rented accommodation to patients (hospital room charges in some cases)
Providing services like ambulance, cosmetics, or health club/spa facilities
Any other non-exempt services (like canteen services for visitors, etc.)
In these cases, Service Tax may apply.
What is the official status?
Services provided by clinical establishments or medical practitioners are exempt under Notification No. 25/2012-ST dated 20 June 2012 (this notification was issued after your query but was applicable retrospectively).
Earlier, hospitals were exempted from Service Tax on medical services.
What should you do?
Ask the hospital to clarify the basis of charging Service Tax.
If it is on medical treatment/surgery, you should not be charged Service Tax.
If it is for non-medical services (like room rent, laundry, etc.), Service Tax may be applicable.
Summary:
Service type Service Tax Applicable?
Medical treatment/surgery No (Exempt)
Non-medical services (room rent, ambulance, etc.) Yes, as per applicable rate (usually 12-14%)
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