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  • Category: Tax Planning

    Query regarding filing GST returns for Clinic


    Having a question about filing GST returns for a clinic? Searching for detailed rules and regulations for providing services in a day care clinic? Scroll through this Ask Expert page and get answers for your query.

    I am a doctor and run a Day care clinic based at Pune in Maharashtra in which I provide health services for my patients.

    My question is whether I need to file GST return and pay GST for the products I use to provide my service. I am aware of the following points:
    1. GST registration is not required as my turnover is less than INR 20 Lakh per annum.
    2. GST on medical services is 0%. I think this includes my consultation fees.
    3. I am using products like IV bottles, Injection Syringes, medicines for which I pay the GST amount as informed by my supplier.
    4. I am not retailing any medicines, as all of them are given on prescription.

    Are all the medicines, IV bottles, Injections and tablets being used in the clinic considered under the consultation fees? Thus I do not need to consider them as separate sales? And since my turnover is less than 20 lakhs; since they are not separate sales, I do not need to register for GST and file GST?

    Or do I need to show them as separate sales and thus register for GST?
  • Answers

    4 Answers found.
  • The following health services are not exempted under GST.
    1. Medicines that are sold to the patients are not exempted. GST at the rate of 12% or 18%
    2. Tests that were done outside by the accredited laboratory and giving consultancy. These services are also not exempted and GST as applicable is to be paid.
    3. The charges realised from the food supplied to attendants or visitors or outpatients on the chargeable basis are taxable and GST is as applicable. If these supplies are outsourced the supplier has to pay the tax.
    4. Rents realised by the hospital by leasing a part of their building to other services is also taxable.
    5. To decide on the turn over of a clinic, the identification is by the PAN number of the doctor who is running the clinic. The person whose PAN number is given for the clinic's overall income or aggregate income can be taken as the income to decide whether GST registration is required or not. If the aggregate income is more than 20 lakhs then only the registration is required.
    So the cost of medicines you are directly supplying can't be taken as consultancy charges and that income also should be taken as income for calculation the aggregate income. If your aggregate income is less than 20 lakhs no registration is required. If your total income including all sources is more than Rs. 20 Lakhs means you have to pay GST.

    drrao
    always confident

  • As per the notification No. 9/2017-Integrated Tax (Rate), dated 28th June, 2017 issued by Ministry of Finance, Department of Revenue, Govt. of India and on the recommendations of the GST Council, inter-state supply of health care services are exempted from the levitation of Integrated Tax under sub-section (1) of section 5 of the GST Act, specified in the corresponding entry without any conditions. In entry No. 77 (SAC – 9993) health care services by a clinical establishment, an authorised medical practitioner or para-medics; services provided by way of transportation of a patient in an ambulance, are exempted.

    1. Your Turnover is less than INR 20 Lakh per annum hence you do not require GST registration. But you should remember that your aggregate turnover must not exceed 20 lakh in a financial year.
    2. Health care services or medical services by a clinical establishment are exempted from GST, wherein a clinical establishment means a hospital, nursing home, clinic or any other institution that offers services or facilities requiring diagnosis or treatment or care for illness or injury, in India. Services offered by senior doctors or consultants are healthcare services which is exempt.
    3. You are using IV bottles, Injection Syringes, medicines for which you are paying the GST amount as informed by the supplier. GST on medical equipment are included in Chapter 90 of HSN code by the GST Council in India. Syringes, needles, are included under HSN code 9018 31 00 & 9018 32 20 and GST is applicable at the rate of 12%. Medicines are also not exempted to GST.
    4. As you are not retailing ant medicine and giving prescription only then it comes under consultancy services and are exempted.

    All the medicines, IV bottles, Injections and tablets which are being used in the clinic and charged from the patients will not be considered under the consultation fees. You need to considered it as separate sale. And if the aggregate turnover will exceed 20 lakh per annum in that case you need to file GST.

  • Doctors consultation charges do not attract GST but if you are selling some injections or medicines to the patients yourself then GST will be charged on that and you can charge that to your patient. Generally a doctor will not sell medicines and will give only prescription to the patient so that the patient can purchase those medicines from a pharmacy. So you can keep that point also in mind.

    You are getting the medicines and other things from some place which is already charging GST from you on that and depositing that GST to Govt. In that case whatever GST yo have charged to your patients for the sale of those items is to be reduced by the input GST tax so even if your turnover is more than 20 lakhs in a year you may not be liable to pay the full GST.

    Let me make it clear by citing an example. Let us assume you earn Rs 20 lakh from consultation then this is free from GST. Suppose in one year you buy Rs 30 lakh worth of material from outside having a GST component of Rs 3 lakh and sell it in 40 lakh having a GST component of Rs 4 lakh then you have to pay only the difference GST which is only Rs 4 lakh - Rs 3 lakh = Rs 1 lakh. As you have taken this from the patients only, it makes sense to deposit it if you are in that bracket (turnover more than Rs 20 lakh).

    Thoughts exchanged is knowledge gained.

  • Most of the expenses related to healthcare are paid out by the pockets of the patients or their families. Government has reviewed the situation and has taken some recourse to minimize the burden on the medical expenditure by way of exemption of such expenses from the levy of taxes.
    While determining the tax regime, the healthcare services were kept out of the preview of the service tax.
    In health sectors, some services such as consultation fee of the doctors, room rent of the hospitals, medicines, medical and clinical tests, services of ambulance, blood banks, treatment of clinical wastes etc.
    We have to understand some important points used under this context. Our areas will cover the following points-
    1) Healthcare Services
    2) Clinical Establishments
    3) Authorised Medical Practitioners
    4) Paramedics.
    1)Healthcare Services- Healthcare Services are meant for the treatment or care of illness, injury, deformity, abnormality or pregnancy calling for medicines through our recognised system of treatment such as Ayurveda, Allopathy, Sidha, Unani, Homeopathy etc.
    2) Clinical Establishment- Clinical Establishment would denote to a hospital, nursing home, clinic, sanatorium or any other institution where treatment or care of illness, injury, deformity, abnormality both physical and mental are treated by the competent doctors through the recognised system of medicines.
    3) Authorised Medical Professionals- The definition of the authorised medical professionals brings out the following perquisites -
    1) Practitioner should be registered
    2) He should have a requisite medical qualification
    3) Such qualification should be of any system of medicine recognised in India.
    Hence irrespective of the recognised medical system such as Allopathy, Ayurveda, Sidha, Homeopathy etc, the doctors are exempted from GST.
    Other areas where GST is not applicable is as follows-
    1) Blood Banks
    2) Ambulance Service
    3) Pathological and other medical tests
    4) Biomedical Wastes
    5) Room Rent of the hospitals.


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