GST on Doctor consultancy services provided by a private limited company.

[deepak gulati]

We are a private limited company and have established center for Doctors consultation services through clinic set up by us. The promoters are Doctors and medical services are provided by qualified employed Doctors. The company raises invoice and collects fees.
what will be GST implication as same are covered in medical services.

[Sadanand Bulbule]

In terms of Entry No 74 of Notification No. 12/2017-Central Tax (Rate), exemption is availbale.

Judicially this matter is well settled.

[Sadanand Bulbule]

2026 (6) TMI 307 - KARNATAKA HIGH COURT

[Sanjeev Agarwal]

Facts understood

• A Private Limited Company owns and operates clinics.
• The promoters are doctors.
• Qualified doctors are employees of the company.
• Patients visit the clinic.
• The company raises the invoice in its own name.
• The company collects consultation charges.

The critical issue is whether exemption is available even though the supplier is a company and not an individual doctor.

Relevant GST Provision

Notification No. 12/2017-Central Tax (Rate), Entry 74 exempts:

Health care services by a clinical establishment, an authorised medical practitioner or para-medics.

"Clinical Establishment" includes

A hospital, nursing home, clinic, sanatorium or any institution that offers services requiring diagnosis or treatment for illness, injury, deformity, abnormality or pregnancy.

Therefore, the exemption is not restricted to doctors alone.

It extends to clinical establishments, irrespective of whether they are:

• Proprietorship
• Partnership
• LLP
• Company

A private limited company can therefore qualify as a clinical establishment.

Conditions to be satisfied

The exemption is sustainable if:

• The clinic is actually engaged in diagnosis/treatment.
• Doctors are registered/qualified medical practitioners.
• Consultation is rendered by the employed doctors.
• Invoice relates to medical consultation/treatment.
• Charges are towards healthcare services.

Important distinction

Exempt

• OPD consultation
• Diagnosis
• Treatment
• Medical advice
• Follow-up consultation
• Minor procedures forming part of healthcare

Taxable

If the company separately supplies:

• Pharmacy sales (subject to GST on medicines)
• Cosmetic procedures not amounting to healthcare
• Health club/wellness packages
• Beauty treatments
• Room rent beyond applicable thresholds (where taxable under current GST provisions, if applicable)
• Cafeteria
• Parking
• Administrative services supplied to another hospital

These need separate analysis.

Areas requiring careful review

The GST position can change if your commercial arrangement differs from a pure healthcare model. For example:

Arrangement	Likely GST position
Company operates clinic and employs doctors	Generally exempt
Company only provides infrastructure to independent doctors	May involve taxable renting/business support services
Company merely collects fees as an agent for doctors	Requires examination of principal-agent relationship
Company provides management services to another hospital	Generally taxable as management/business support services

[deepak gulati]

In continuation of our above discussion, please advise what would be the position if the company does not have clinical registration.

As discussed, obtaining clinical registration may not be possible in this case, since the company is only providing consultancy services from the clinic and is not undertaking any diagnostic, operative or clinical procedure work.

Kindly guide us on the applicable compliance position in such a scenario.

[Sadanand Bulbule]

The GST notification does not expressly mandate registration under any Clinical Establishments Act or State law. It only requires that the supplier should qualify as a "clinical establishment" based on the nature of activities undertaken.

Refer the judgement mentioned at Sl. No.2 above.

[deepak gulati]

Bulbule Sir,

Although the notification does not specifically mention registration under the Clinical Establishments (Registration and Regulation) Act, 2010, every state has its own provisions requiring medical institutions to obtain such registration.

Further, in the present case, the order records the following undisputed fact:

"It is an undisputed fact and a matter of record that the petitioner is also a Clinical Establishment registered under the Clinical Establishments (Registration and Regulation) Act, 2010."

In light of the above, would this not have an impact on our claim for exemption, considering that the company in our case is not registered as a Clinical Establishment?

Kindly throw some light on this aspect as well.

[Sadanand Bulbule]

If registration under the applicable State Private Medical Establishments Act is mandatory and the company is not so registered, the claim for GST exemption under Entry No. 74 of Notification No. 12/2017-CT (Rate) becomes legally vulnerable and may not be sustainable, notwithstanding that the notification does not expressly prescribe such registration as a condition.

[Sadanand Bulbule]

Dear Deepak ji

Plz note that, in terms of Section 3 of the Karnataka Private Medical Establishments Act, 2007, it is mandaory for every Private Medical Establishment to get registered. And only after satisfactory compliance of pre-requisites prescribed under Section 6, the registration is granted under Section 7(1) of the said Act. Effectively no Private Medical Etablishment can run or maintain in the State without registration.

[Sanjeev Agarwal]

GST Position in the Absence of Clinical Establishment Registration

Entry 74 of Notification No. 12/2017-CT (Rate) exempts health care services provided by a clinical establishment, an authorised medical practitioner or para-medics. The notification defines a clinical establishment as a hospital, nursing home, clinic or any institution providing diagnosis, treatment or care for illness or injury. Notably, the notification does not expressly require registration under the Clinical Establishments Act or any State law as a condition for availing the exemption.

Accordingly, if the company operates a consultation centre, employs qualified doctors, provides medical consultation through such doctors, and raises invoices in its own name, there is a sustainable view that the services continue to qualify as exempt health care services, even without clinical establishment registration. Medical consultation itself constitutes health care and the exemption is not limited to diagnostic, surgical or inpatient services.

However, the absence of clinical registration increases the risk of litigation. The GST authorities may contend that the company is merely providing administrative or infrastructure support and is not operating a clinical establishment. This risk is higher where the company only facilitates consultations by independent doctors rather than itself providing medical services.

The exemption is considerably stronger where the doctors are employees of the company, the company contracts directly with patients, collects the consultation fee and assumes responsibility for the medical services rendered.

It should also be examined whether registration under the applicable State Clinical Establishments law is mandatory for an OPD consultation centre. While non-registration may not automatically deny the GST exemption, failure to obtain a registration required under State law may invite regulatory consequences and could weaken the company's position during a GST audit.

Accordingly, the company should maintain adequate documentation, including doctors' employment agreements, medical registrations, patient records and invoices evidencing that it is itself providing health care services. On the facts provided, the exemption appears supportable, though the absence of clinical establishment registration presents a moderate litigation risk and should be evaluated in light of the applicable State law.

[Shilpi Jain]

The exemption will be applicable only if the COmpany is a clinical establishment. whether co. has taken any license to run the clinic? further facts required to comment on the exemption

AI Summary

Healthcare service exemption may cover company-operated clinics, but mandatory State registration and the actual supply arrangement remain material. GST exemption for healthcare services may apply where a company operates a clinic, employs qualified doctors, contracts with patients and invoices medical consultation, diagnosis or treatment in its own name. The exemption is not confined to individual doctors, but depends on the company qualifying as a clinical establishment by its activities. Infrastructure, agency, management-support and separately supplied non-healthcare services require separate GST treatment. Although clinical registration is not expressly required by the exemption notification, failure to obtain registration mandatory under State law may weaken the claim and create regulatory exposure.