Treatment Of Psoriasis, Dermatitis And Other Skin Disorders Qualifies As Healthcare Service Exempt From GST: Kerala AAR
Pranav B Prem
The Kerala Authority for Advance Ruling has ruled that dermatological treatments provided for conditions such as psoriasis, dandruff, dermatitis, fungal infections and folliculitis qualify as “healthcare services” and are therefore exempt from Goods and Services Tax (GST). The Authority clarified that such treatments are therapeutic in nature and cannot be treated as cosmetic or aesthetic procedures merely because they relate to skin care.
The ruling was delivered by a Bench comprising Jomy Jacob, IRS (Additional Commissioner of Central Tax) and Mansur M. I. (Joint Commissioner of State Tax) on an application filed by a board engaged in providing dermatological treatments through qualified medical practitioners at licensed clinics.
The applicant sought an advance ruling on whether the dermatological services offered by it, including treatment for chronic and infectious skin disorders such as psoriasis, dermatitis, dandruff, fungal infections and folliculitis, were exempt from GST. It contended that the services rendered constituted “healthcare services” provided by a “clinical establishment” as defined under Notification No. 12/2017–Central Tax (Rate).
It was submitted that the treatments were carried out by qualified medical practitioners in duly licensed clinics and were supported by medical prescriptions, diagnostic reports and patient records. The applicant emphasised that the procedures were undertaken for diagnosis, treatment and management of recognised medical conditions and not for cosmetic enhancement or aesthetic improvement.
The Authority examined the scope of Entry 74 of Notification No. 12/2017–Central Tax (Rate), which grants GST exemption to healthcare services provided by a clinical establishment, authorised medical practitioner or paramedics. It noted that “healthcare services” have been defined to include services by way of diagnosis or treatment or care for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in India, but exclude cosmetic or plastic surgery undertaken to improve appearance.
Analysing the nature of the treatments in question, the AAR observed that ailments such as psoriasis and dermatitis are well-recognised medical conditions requiring professional diagnosis and sustained medical treatment. The Authority recorded that these conditions often involve chronic inflammation, infection or immune-related complications and cannot be equated with cosmetic concerns.
The AAR further noted that the exclusion under the exemption notification applies only to procedures that are purely cosmetic or aesthetic in nature and are undertaken solely to enhance appearance. In the present case, the treatments were found to be therapeutic and medically necessary, with supporting clinical documentation demonstrating that they were rendered as part of healthcare delivery.
Rejecting any attempt to classify the services as cosmetic, the Authority held that the mere fact that treatment relates to the skin does not make it cosmetic. It observed that “treatment of skin disorders such as psoriasis, dermatitis or fungal infections is aimed at curing or managing disease conditions and alleviating suffering, and not at cosmetic enhancement”.
On these findings, the Kerala AAR ruled that the dermatological treatments provided by the applicant fall squarely within the definition of “healthcare services” and are exempt from GST under Notification No. 12/2017–Central Tax (Rate). Accordingly, no GST is payable on the consideration received for such treatments, so long as they are provided by qualified medical practitioners in a clinical establishment and are therapeutic in nature. The application was disposed of by holding that treatment for psoriasis and other recognised skin disorders qualifies for GST exemption, reaffirming the distinction between taxable cosmetic procedures and exempt medical healthcare services under GST law.
Applicant's Name: Advanced Hair Restoration India Private Limited
