Question on GST : I am a practicing Clinical Doctor. I purchase medicines from suppliers and in the process pay them GST (previously called as VAT) on the bills received from them. I then dispense medicines to my patients and issue them receipts including consultation+dispensing fees. It goes without saying that the cost of medicines so dispensed to medicines includes the GST component too. Am I covered under the GST Act ? To what extent are healthcare services covered under the GST Act ? Are healthcare products covered under the GST Act ? How are products different from services as per the GST Act ? Do I have to register for a GST number under the GST Act, 2016 ? Can I recover ‘input tax credit’ (as paid to suppliers vis-a-vis when collected from patients while dispensing medicines to them) under the GST Act ?
Answer: 1. Healthcare services are exempt from GST under the GST Act, 2016. Healthcare products are not exempted, however. Healthcare products are chargeable. 2. Healthcare services include services rendered for treatment at a healthcare facility. Healthcare prodcts include medicines, instruments, machines, equipments, infrastructure, etc. 3. When a Doctor dispenses medicines, they form part of healthcare services (as per the GST Act) and for a reasonable period of time (as per IMC Rules, 2002), they are nevertheless ‘healthcare services’ as a whole and are therefore not chargeable to GST. Please note that ‘services’ are defined under the GST Act, but ‘reasonable period’ is not defined by either the GST Act, 2016 or the Indian Medical Council Rules, 2002. 4. Dispensing is not same as selling. Selling is not same as dispensing. When a Doctor charges a fees for services rendered that includes fees+medicines as a whole, it is a service (as per GST Act) and called dispensing (as per IMC Rules). It is not called as selling medicines. This is exempted under the GST Act. 5.. However, if a Doctor charges for medicines/other healthcare products solely, these are chargeable for GST. 5. There is no need for Doctors to register under the GST if they are providing only healthcare services. 6. If they are selling, then only one needs to register. Anyways, a Doctor cannot sell medicines unless he is involved in a trade of medicines/healthcare products. 7. In short, GST does not change anything for practicing Doctors. GST is Goods & Services Tax, and replaces many taxes like VAT, etc as they were in use previously. 8. Input tax credit can be availed by Doctors if they are involved in a trade of medicines/healthcare products, not while dispensing medicines to their patients. –