Medical expenses are day to day becoming more costly. Do you need to pay service tax on health care services? No. Thanks to Central Government that it gave mega exemption to medical and para medical services.

service tax on health care services

Service tax on health care services:

According to section 66B of mega exemption notification no. 25/2012,

Health care services by a clinical establishment, an authorised medical practitioner or para – medics are included in mega exemption and this taxable service is exempt from whole of the service tax.

You can see it on following link

Note that para medical service is also included in exemption. So services which covered in para medical definition are also exempt.

Point 2.

Authorised medical practitioner meaning:

authorised medical practitioner” means any medical practitioner registered with any of  the  Councils of the recognised system of medicine and includes medical professional having the requisite qualification to practice in any recognised system of medicine as per any law for the time being in force. As per notification.

Who are included in exemption?

So there is clear exemption to services of MBBS, surgeons, nursing homes, physiotherapist or other medical professionals.

Ambulance services are fully exempted in budget 2015.

In recent budget 2015, fully exemption is given to ambulance services .

Service receiver and service tax:

Service tax on health care service is exempt no matter patient is resident or non resident of India.

Read about service tax changes in budget on this post.

Exemption to service tax on health care services has given bit relief to needy and poor people. I hope someday government will take steps to reduce prices of medicines and control high profits of pharma companies.

22 thoughts on “Service tax on health care services : Fully exempt

  1. what is difference between manpower recruitment agency and agency who recruit person for comapany and charge fees as recruitment fees.and suggest service tax matter on concern subject…

    1. The basic difference is control on manpower while they are working. Contractor supplies manpower and the manpower works as per instruction of contractor and salary or wages are paid by contractor, it is manpower supply.

      However, recruitment agency only helps to find right candidate or employee for the company and charges fees to company. The employees do not work under instructions or control of recruitment agency thereafter.

      Read my post for full understanding,

      1. It means recruitment agency not comes under reverse charge mechanisum which is applicable to supply of manpower.Am i right?

      2. Yes, they are not covered under RCM. Charge 12.36% in bill. (14% from 1st june, 2015.)

  2. Whether Service Tax on Health care services is applicable to NRI or expats who come to India for work or foreigners who visit India for treatment ???

    1. Dear Author,

      Thank you for your expedite reply,

      Subject line is ” Service tax on health care services : Fully exempt.

      My questions :

      1.Whether this service tax is fully exempted for NRI’s, expats who come to India for work or foreigners who visit India for treatment ???

      2. If it is applicable what is the Service tax %.

      3. If it is applicable, on what basis it can be applied as it is fully exempt for Citizens in India and whether this service tax credit can be utilized.

      Thanks & Regards

      Venkat Sriram

      1. Health care service provided by authorized medical practitioner is exempt no matter about residential status of patient. It was mistake in reply.

  3. Is service tax applicable on providing preventive care to a corporate employee by a hospital at d corporate premises…d hospital bills d corporate for d cost towards a doctor, nurse,ambulance maintenance, Driver salary and medicines..with clear break up for each category … D doctor, nurse and ambulance driver are on roll of d hospital… Pls advice

    1. As per my understanding, it is para medical services and whole service is bundled service so exempt. Still search for exact words used in mega exemption.

  4. I’m developing the software digital medical record and providing the software of hospital and liability for service tax are exemption of service tax….

    1. It cant be exempt because software development service is not under exemption but health care services are exempt. However, if you sell in built software without doing any development for purchaser, vat should be levied on bill. ( and not service tax).

  5. is service tax applicable on orthotist & prosthetist, diabetic foot expert providing consulting related to artificial limbs and rehabilitation and also provides the said artificial limbs to the patient as per the measurements of the patient.
    thank you

    1. It is clear medical service. If you are authorized medical practitioner, the service is wholly exempt and no need to charge service tax.

  6. I have provided para medics staff to government hospital Whether the service is exempt or falls under manpower supply service

    1. It is clearly manpower supply service. However, check exemption available while providing service to government.

  7. We had provided the Ambulance Service With Driver and Helper to a Contractor and contractor provided to Indian Oil Corporation Ltd.? What will be the impact of service Tax on both of us. Period of service is 2014-15 & 2015-16.

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