GST on Dermatology & Healthcare Services: What’s Exempt and What’s Taxable

For a skin clinic, the same chair can deliver two very different things in the eyes of GST law: a medical treatment that is exempt, or a beautification service that is taxable. Knowing which is which protects both the clinic and the patient.

By ANTM & Associates, Chartered Accountants

The whole question turns on one thing: is the service medical, or cosmetic?

The Rule: Healthcare Services Are Exempt

Under GST, healthcare services are exempt when they are provided by:

• A Clinical Establishment, and
• An Authorised Medical Practitioner.

"Healthcare services" means services of diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy. The medicines, consultation, and treatment tied to such services are all exempt.

The Exceptions — Where the Exemption Stops

The definition specifically does not include the following, which therefore fall outside the exemption:

• Hair Transplantation
• Cosmetic Surgery
• Plastic Surgery
• Exception:still exempt when done to restore or reconstruct the body's anatomy or function due to injury.

In other words, a nose reshaped purely for appearance is taxable, but the same reconstruction performed to repair damage from an accident remains an exempt healthcare service. Purpose decides the tax.

How to Decide: The One-Line Test

The deck's rule of thumb is simple and worth memorising for any skin clinic:

Treatment-by-Treatment: An Interactive Guide

Below is a working classification of common dermatology treatments. Search for a treatment or filter by category to see whether GST applies. This is an indicative guide — because the same procedure can change category depending on why it is done.

Dermatology GST classifier

Search a treatment, or filter by category.

No GST · Healthcare

• Acne — No GST
• Skin Infection — No GST
• Bacterial Skin Infection — No GST
• Allergies — No GST
• Boils — No GST
• Minor Burns — No GST
• Cracked Heels — No GST
• PRP (Platelet-rich plasma) — No GST
• Dandruff — No GST
• Eczema — No GST
• Hair Fall — No GST
• Herpes — No GST
• Insect Bites — No GST
• Miliaria — No GST
• Nail Infection — No GST
• Inch Loss — No GST
• Psoriasis — No GST
• Rashes — No GST
• Vitiligo — No GST

GST applies · Beautification

• Acne Scar & Spots — GST applies
• Age Spots — GST applies
• Anti Ageing — GST applies
• Stretch Marks — GST applies
• Botox — GST applies
• Skin Resurfacing & Polishing — GST applies
• Mesotherapy — GST applies
• Skin Lightening — GST applies
• Warts & Skin Tags — GST applies
• Wrinkles — GST applies
• Tattoo Removal — GST applies
• Fillers — GST applies
• Collagen Induction Therapies — GST applies
• Laser Resurfacing — GST applies
• Permanent Hair Reduction — GST applies

Classification as indicated by ANTM & Associates for general guidance. The decisive test is the purpose of the treatment (curative / preventive / diagnostic vs. cosmetic). A treatment listed here may fall in the other category on specific facts — please confirm before relying on it.

What follows the service — medicines and consultation

Medicines, consultation, and treatment services provided as part of a healthcare service are exempt.

The same items provided as part of a beautification service are taxable.

Do You Even Need to Register? The Turnover Rule

Exempt income does not switch off the registration threshold. GST registration is not mandatory up to Rs. 20 lakh of turnover, and becomes mandatory once you cross it.

Threshold

Registration is not mandatory up to Rs. 20 lakh turnover; mandatory once crossed.

The catch

The Rs. 20 lakh limit counts taxable and exempt turnover together — so a busy clinic doing mostly exempt work can still cross it.

Disclaimer: This article is for general information only and does not constitute tax advice. GST classification depends on the specific facts of each service and is subject to change. Please consult a qualified professional before acting.