The Truth About GST on Hospital Services: Aaditya Iyengar's Guide

As you know healthcare charges continue to rise, patients need to understand their rights and the regulations regarding the costs charged during medical treatments. Aaditya Iyengar, a well-known finance influencer, has recently highlighted a critical issue concerning the application of Goods and Services Tax (GST) on hospital bills. Often, patients are unaware of which services are GST-exempt and which are not, leading to overcharges that could have been avoided with proper guidance and knowledge. 

Understanding GST on Hospital Services:

GST is a tax on goods and services sold internally for consumption. While it is a broad tax applied to many goods and services, certain healthcare services are free from GST. Knowing about this can save patients from unnecessary expenses.

Suppose a patient receives a hospital bill amounting to Rs. 5 lakh and is informed that they must pay an additional 18% GST on this amount. Without proper knowledge, the patient might follow and pay the total, including the non-payable GST charges. However, as Aaditya Iyengar highlights, most of the services listed in the bill might be exempt from GST. Here, know the proper details.

GST-Exempt Services:

Doctor Consultation and OPD Services

• Consultations with doctors and Outpatient Department (OPD) services are GST-exempt. Patients should not be charged GST for these services.

Hospital Room Rent

• If a patient is admitted to a hospital room with a rent below Rs. 5000 per day, this service is free from GST. Only rooms costing above this entrance attract GST.

Ambulance Services

• GST does not apply to ambulance services. Any charges for using an ambulance should be GST-free.

Blood Bank Services

• Services provided by blood banks, including the cost of blood and blood products, are exempt from GST.

Counseling Services

• Medical and psychological counseling services provided by hospitals are GST-exempt.

Medical Tests

• Diagnostic and laboratory tests conducted for medical reasons are also GST-free. 

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GST on Medicines:

In terms of medicine, these rules become slightly complicated regarding the GST charge. According to the law, different medicines have different charges up to 5% to 18%. Here is the list. 

Life-Saving Medicines

• Medicines categorized as life-saving treatments, such as vaccines, Bulk drugs, ayurvedic and homeopathic treatments, diagnostic test kits, and orthopedic appliances all attract 5% GST. 

Non-Essential Pharmaceutical Products

• Other pharmaceutical products that are not classified as essential attract a higher GST rate of 18%. On the other hand medicines for personal consumption, sterile goods for wound closure, and gloves-like items attract 12%.