Effect of GST ON HEALTH SERVICE (For Hospital)

Itc can be claimed when used for furtherance of business else you cant claim ITC.

As per Section 2(19) of the Central Goods and Services Tax (CGST) Act, 2017, unless the context otherwise requires, the term 'capital goods' means goods, the value of which is capitalized in the books of accountsof the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.

* ITC on pharmacy purchase 
- Yes... ITC can be claim for Pharmacy business.

* services are provide Hospital to Hospital
- If Only provide services then It's exempted.

* ITC on capital goods
- Yes... ITC available if using furtherance of business.
- Also refer sec 17(5) of CGST act with sec 17 of CGST...

if hospital provides service to in patients than its applicable?

If only service then exempted...

If the Capital Goods being used to provide exempted services , The ITC has to be reverse in proportion to exempted sale

As per Rule 43 (c) Reversal of ITC on capital Goods


Calculate monthly credit - ITC ÷ 60, say X
(ITC= ITC on capital Goods)

2. Calculate ITC attributable to exempt supply - X x Exempt Supply ÷ Total Supply for the month

3. Reverse the same for every month (in 3B)

4. Pay interest as well 😂

GST not applicable on health care service and diagnostic service provided by hospitals and doctors. GST applicable on sale of medicines.