GST on Hospital Room Rent

Applicable Only on Non-ICU Rooms Above ₹5,000 Per Day

If your hospital room rent exceeds ₹5,000 per day and it is not an ICU room, then 5% GST is applicable. Rooms below ₹5,000 per day remain exempt from GST. ICU rooms are also fully exempt, regardless of the rent charged.

Only Applicable for Rooms Booked Separately

The GST applies only if the room is charged separately in the hospital bill. If the room rent is bundled with other services in a package format (like surgery, tests, etc.), and not shown separately, then GST is not applicable on the room component alone.

No GST for Government Hospitals

Rooms in government hospitals or government-aided healthcare facilities are not subject to GST, even if they charge more than ₹5,000 per day. However, this may vary as per the state government policies.

Hospitals Must Be Registered Under GST

The hospital must have a GST identification number (GSTIN) and must be registered under the GST regime. Smaller clinics and nursing homes that are not registered under GST may not charge this tax.

Impacts Patients Paying Out of Pocket

This GST is not just applicable to insured patients; it applies to all. Even if you are paying the bill from your own savings, you will still be charged this tax if conditions are met.

Room Rent Is Just One Part of the Total Hospital Bill

The hospital room rent can only be billed as a part of the overall hospital bill, which includes charges for other medical services. The hospital must provide a detailed invoice that shows the breakdown of charges, which includes the room rent and then the other services provided.

GST Impact Varies with the Type of Healthcare Service Availed

The total impact of GST on the comprehensive bill will also largely depend on the type of service availed. Services like preventive healthcare services, clinical services, and diagnostic services are exempted, and no GST will be levied on these services in particular.

Shield Your Health and Wallet with the Right Insurance Plan

GST and variable components can substantially add a burden to your hospital bills; in such cases, it is always advisable to invest in a comprehensive health insurance plan to prioritise health and well-being despite the barriers of GST.

• Higher Costs for Non-ICU Rooms Above ₹5,000/Day - If a hospital room (non-ICU) costs more than ₹5,000 per day, a 5% GST is now applicable. This increases the per-day room cost directly for patients not in critical care.
• No Input Tax Credit for Hospitals - Hospitals cannot claim Input Tax Credit (ITC) on room rent GST, meaning the entire burden shifts to the patient.
• Out-of-Pocket Expenses Rise for Uninsured Patients - Uninsured patients may face higher overall hospital bills due to the added tax component, especially for longer stays.
• Insurance Policy Sub-Limits Get Affected - Health insurance policies with sub-limits on room rent may not cover the GST amount, leading to extra expenses for policyholders.
• ICU and Emergency Care Stay Exempt - Rooms under ICU, CCU, ICCU, and NICU are exempt from GST, offering relief for patients needing critical care.

Financial Security

Health insurance ensures financial protection in the unforeseen case of medical expenses. In case of any illness or injury, health insurance policies help cover costs, including hospitalisation, doctor fees, diagnostic tests, medical services, and other expenses that add to the mounting bills.

Access to Good Healthcare

With comprehensive health insurance, access to quality healthcare becomes seamless without the limitation on costs. Health insurance plans often provide coverage for medical services and procedures, including preventive care, check-ups, and hospitalisation. Check for your service providers' inclusions when choosing a health insurance plan.

Tax Benefits

Health insurance offers tax benefits under the Indian Income Tax Act, thereby reducing tax liability. On paying the premium for health insurance policies, one is eligible for tax deductions under Section 80D of the Income Tax Act.

Cashless Treatment Facility

Most health insurance providers offer cashless hospitalisation in their network hospitals. This means patients can receive treatment without paying upfront, as the insurer settles bills directly with the hospital.

Coverage for Critical Illnesses

Several health insurance plans cover life-threatening illnesses such as cancer, heart attack, or kidney failure. This ensures financial support for costly treatments that may otherwise drain personal savings.

Reduced Stress During Medical Emergencies

A health insurance policy reduces the financial stress during emergencies. It ensures that family members can focus on recovery and care rather than expenses.

Nobody expects a hospital visit, but when it happens, even small things like GST on room rent can add up quickly. That 5% may not sound like much at first, but over a few days, it can strain your budget, especially if you are paying out of pocket or your insurance has sub-limits.

The rules may seem technical, but knowing them can help you avoid surprises. More importantly, having a good health insurance plan can take a big load off your shoulders. It covers not just treatment, but the little extras like this, too.

In tough moments, it is one less thing to worry about, so you can focus on healing, not hospital bills. Get a multi-year policy to get the benefit of 0% GST even if future tax policy gets changed.