GST billing for clinics: exempt, taxable, or both on one bill.

The rule

Which clinic services are exempt from GST?

Serial number 74 of Notification No. 12/2017-Central Tax (Rate) exempts health care services by a clinical establishment, an authorised medical practitioner or para-medics. The notification defines health care services as services by way of diagnosis, treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicine in India.

The same definition carves out an important exception. It does not include hair transplant or cosmetic or plastic surgery, except when undertaken to restore or reconstruct anatomy or functions of the body affected by congenital defects, developmental abnormalities, injury or trauma.

In practice this gives clinics three buckets:

• Exempt: consultations, diagnosis and treatment of a condition by a doctor or registered para-medic, for example physiotherapy for a back injury, or a dermatologist treating psoriasis.
• Taxable cosmetic or aesthetic services: procedures done to improve appearance rather than treat a condition, such as many aesthetic skin treatments and hair transplants. Rulings have drawn the line case by case, so the same machine can produce an exempt treatment and a taxable one.
• Taxable goods and other services: products sold to patients over the counter (supplements, skincare, braces bought separately), and non-clinical services such as a gym or spa section run by the clinic. Spa and salon-type services are taxed at 5% without input tax credit from 22 September 2025.

If you are unsure which bucket a service falls into, take it to your CA with a description of who performs it, why, and what condition it addresses. That is what the tax authorities look at.

Worked examples

Three clinic bills, done properly

1. Physiotherapy clinic, not registered

A physiotherapy clinic only provides treatment for injuries and pain, with turnover well under the threshold. It does not register, and its bills show the session fee with no GST and no GSTIN. Nothing more is needed.

2. Dermatology clinic with an aesthetic wing, registered

A patient sees the dermatologist for acne treatment (exempt, ₹800) and books a cosmetic peel for pigmentation done for appearance (taxable). The patient also buys a sunscreen (goods, at its HSN rate). The consultation line carries zero tax; the peel and the sunscreen carry their own rates, each with CGST and SGST if the patient is in the same state. The clinic's GSTIN is on the bill because it is registered.

3. Wellness clinic selling supplements

A nutrition consultation by a qualified dietitian may or may not count as health care in your case; ask your CA. The protein supplement sold at the desk is goods and is taxable at its HSN rate. Tracking the supplement as a product also lets you see stock and margin.

Input tax credit: the cost clinics miss

A clinic making only exempt supplies cannot claim input tax credit on what it buys. One with a taxable cosmetic or retail side can claim credit only on the share used for taxable supplies, apportioned under Rule 42. This affects how you price the taxable services, so it is worth a conversation with your CA before you set your price list.