The health care sector is one of the biggest sectors in India, is regulated by the Indian Medical Association (IMA). Doctors, apart from engaging themselves in healthcare services by working as doctors and consultants in hospitals, or running their own clinic etc. can do a lot of other activities.
Hence, the taxability depends on what all activities a doctor is involved in.
Exemptions of health care services: Notification No. 9/2017 has exempted healthcare services.
It exempts Health care services by a clinical Establishment or Authorized medical practitioner or Para medics.
Health Care Services: Health care services implies to improvement and maintenance of physical and mental health. Application of all the health care services in any recognized system of medicines in India except hair transplant, cosmetic surgery or plastic surgery and the ones done due to congenital defects, development abnormalities, trauma or injury are exempt from the ambit of GST.
Clinical Establishment: It includes any hospital, nursing home, maternity clinic, dispensary, clinic, sanatorium, pathology, or any other diagnostic or investigative services owned and controlled by-
ü Government or a department of government,
ü A trust,
ü A corporation including society,
ü Local authority, and,
ü Any single medical practitioner.
Clinical establishments do not include any establishments owned, controlled and managed by the armed forces.
Authorized Medical Professional: Any practitioner registered with any council of recognized system of medicine or any recognized medical law in India and having a qualification to practice in any recognized system of medicine in India, excluding hair transplant or domestic surgery are exempt from paying GST in India
Paramedics: Any trained professional such as a nursing staff, physiotherapist, technicians, lab assistant are accountable for their services when provided independently, are therefore exempt.
Whether doctors are required to register under GST
GST law requires registration on the basis of turnover. It provides a threshold turnover exemption up to Rs 20 lakh from registration. While determining the turnover for threshold exemption, one has to see the total turnover (exempt + non-exempt).
Where the doctors are engaged only in healthcare services: Provision of Health care services, as explained earlier, are an exempt service and since the services are exempt, it also exempts from registration. So, the doctors who are engaged only in exempt health care services are providing only exempt services and thus they aren’t required to register under GST.
Where the doctors are also engaged only in non-healthcare services: Non-health care services aren’t exempt under GST. A Doctor providing both health care & non-health care services has to consider the total turnover from health care & non-health care services. Thus, if the total turnover from all services exceeds Rs 20 lakhs, GST registration is required and hence all compliances to be done such as payment of taxes (on taxable services) and filing of returns.
Examples:
1. A doctor is practicing in a hospital with a turnover of Rs.16 lakhs and also selling educational videos online (such as YouTube) with a turnover of 5 lakhs. Since total turnover i.e. turnover from practice + turnover from educational videos is 21 lakhs, GST registration is required.
2. A Doctor may be earing income from his professional fees and also earning Rent by letting out commercial unit/s with a total income exceeding Rs.20 lakhs, he would be required to register in GST and charge GST on Rental Income @ 18% (no GST on Professional Fees).
3. Remember that when you rent out a residential property for residential purposes, it is exempt from GST.
4. When residential property is leased out for business (either partly or wholly), rent will attract GST and Registration is mandatory if your annual total turnover i.e. turnover from practice + turnover from rentals exceeds Rs.20 lakhs.