Supply of medicines by charitable trust hospital for patient
This query is : Resolved
23 September 2017
What is the applicability of GST on Free-of-Cost supply of Medicines to in-patients by a hospital of Charitable Trust.
23 September 2017
GST not applicable on such free distribution to in patients.
25 September 2017
Thank you Sir
please specify the provision for such exemption.
1) Scope of Supply
2) Value of Supply
3) Any other exemption
please specify the provision for such exemption.
1) Scope of Supply
2) Value of Supply
3) Any other exemption
26 July 2025
Great question! Here’s the detailed explanation about **GST applicability on free supply of medicines by a charitable trust hospital to in-patients**:
---
### 1. **Scope of Supply under GST**
* Under GST, **“supply”** includes all forms of supply of goods or services for consideration.
* However, **free supplies without consideration are generally not treated as supply** (except in some cases like gifts beyond ₹5,000).
---
### 2. **Is free supply of medicines a supply under GST?**
* Since the hospital is providing medicines **free of cost** to **in-patients**, there is **no consideration**.
* Therefore, it is **not a taxable supply** under GST.
* This is aligned with the **principle that supply without consideration is not subject to GST**.
---
### 3. **Exemption under GST**
* Further, **healthcare services provided by a clinical establishment, an authorised medical practitioner or paramedics** are **exempt from GST** under **Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017**, and corresponding State notifications.
* Medicines supplied free to in-patients as part of treatment are covered under **healthcare services** and hence **exempt**.
---
### 4. **Relevant Provisions**
| Aspect | Details |
| -------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Scope of Supply** | No supply as no consideration involved |
| **Value of Supply** | Not applicable |
| **Exemption Notification** | Notification No. 12/2017-Central Tax (Rate) & corresponding State notifications exempt healthcare services including supplies by clinical establishments. |
---
### 5. **Summary**
| Situation | GST Applicability |
| --------------------------------------- | ------------------------------------- |
| Free supply of medicines to in-patients | **No GST applicable** (exempt supply) |
---
### If needed, I can share the exact notification text or help you draft an exemption certificate or declaration for your hospital.
Would you like that?
---
### 1. **Scope of Supply under GST**
* Under GST, **“supply”** includes all forms of supply of goods or services for consideration.
* However, **free supplies without consideration are generally not treated as supply** (except in some cases like gifts beyond ₹5,000).
---
### 2. **Is free supply of medicines a supply under GST?**
* Since the hospital is providing medicines **free of cost** to **in-patients**, there is **no consideration**.
* Therefore, it is **not a taxable supply** under GST.
* This is aligned with the **principle that supply without consideration is not subject to GST**.
---
### 3. **Exemption under GST**
* Further, **healthcare services provided by a clinical establishment, an authorised medical practitioner or paramedics** are **exempt from GST** under **Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017**, and corresponding State notifications.
* Medicines supplied free to in-patients as part of treatment are covered under **healthcare services** and hence **exempt**.
---
### 4. **Relevant Provisions**
| Aspect | Details |
| -------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **Scope of Supply** | No supply as no consideration involved |
| **Value of Supply** | Not applicable |
| **Exemption Notification** | Notification No. 12/2017-Central Tax (Rate) & corresponding State notifications exempt healthcare services including supplies by clinical establishments. |
---
### 5. **Summary**
| Situation | GST Applicability |
| --------------------------------------- | ------------------------------------- |
| Free supply of medicines to in-patients | **No GST applicable** (exempt supply) |
---
### If needed, I can share the exact notification text or help you draft an exemption certificate or declaration for your hospital.
Would you like that?
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