Service Tax on Health care units

Is service tax applicable on health care units?

Q- Are health care units liable for payments of service tax?

 Ans.-The health care services provided by the hospitals are exempted by virtue of entry no. 2 of the notification no. 25/2012-ST dated 20.6.2012. This notification simply exempts the health care services (cosmetic surgery or plastic surgery or hair transplantation is not included) on the grounds that these are provided by clinical establishments. Medical practitioner, pathological clinics are also exempt to service tax under this notification.

Q-Does the above said notification is also applicable on those hospital units which get reimbursed their treatment expenses from the Insurance companies.

Ans.-This notification does not put any such condition regarding settlement of claims by insurance companies or any other business entities. Thus, the exemption under this notification will be unaffected by the fact that the patients are being reimbursed by the insurance companies or any other business entities.

Q-Are cosmetic surgery or plastic surgery or hair transplantation is not covered under this notification?

Ans. - Yes, the cosmetic surgery or plastic surgery or hair transplantation are not covered under this notification.

These services are chargeable to service tax but excluded “any surgery undertaken to restore or reconstruct anatomy or functions of body affected due to congenital defects, developmental abnormalities, degenerative diseases, injury or trauma”. This means only that part of service is taxable which taken to enhance the physical appearance like nose surgery, lips correction etc.

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