India has recently implemented the Goods and Services Tax (GST) regime, which has brought about many changes in the taxation system of the country. The healthcare sector is one of the most important and critical sectors in India, and it is also one of the sectors that have been affected by the GST regime. In this article, we will discuss the impact of GST on health care services that come along with accommodation facility, commonly known as the Wellness package.
The wellness package is a package deal that includes accommodation at a wellness center or resort, along with various health care services such as spa treatments, gym facilities, yoga classes, and other wellness services. The package is designed to provide individuals with a relaxing and rejuvenating experience while also taking care of their health.
Under the GST regime, wellness packages that include both accommodation and health care services are taxed differently based on the nature of services offered. The GST rate on accommodation services is 18%, while the GST rate on health care services is 12%. Therefore, the GST rate on a wellness package that includes both accommodation and health care services is determined based on the percentage of each service offered.
If the package includes more than 70% of accommodation services, then the GST applicable on the entire package would be 18%. On the other hand, if the package includes more than 70% of health care services, then the GST applicable on the entire package would be 12%. However, if the package includes both accommodation and health care services in equal measure, then the GST applicable on the package would be 18%.
While the GST rate on wellness packages is determined based on the percentage of each service offered, there are certain services that are exempt from GST. The services that are exempt from GST under the wellness package include:
1. Services provided by a clinical establishment, authorized medical practitioner or paramedics
2. Services provided by a veterinary clinic
3. Services provided by a fitness center, gym or spa
4. Services provided by a sports club or association
It is important to note that while these services are exempt from GST, other services offered as part of the wellness package would be taxed at the applicable GST rate.
The GST regime has brought about many changes in the taxation system of India, and the healthcare sector is one of the sectors that have been impacted by the changes. The wellness package, which includes both accommodation and health care services, is taxed differently based on the percentage of each service offered. It is important for small and medium business owners and startup founders in India to understand the impact of GST on the healthcare sector and ensure compliance with the new regulations.
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