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GST On Hospital Room Rent

5% GST On Hospital Room Rent And Its Impact On Your Bill

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Home / Health Insurance / Articles / 5% GST On Hospital Room Rent

Did you know? The Goods and Services Tax (GST) Council has declared that 5% GST will be applicable on hospital rooms (non-ICU) with a daily room rent of Rs 5,000 or above. The 5% GST on hospital room rent has been in effect since July 18, 2022.

This means:

Here is an overview of how your hospital bill could look like.

Impact On Hospital Bills Earlier


Room Rent Per Day Rs. 6,000

Room Rent Per Day Rs. 6,000

GST 0%

GST 5%

Total For 3 Days Rs. 18,000

Total For 3 Days Rs. 18,900

Note: This is just an example to illustrate GST impact, actual calculation might vary based on applicable terms.

Your Hospital Bills May Get Costlier
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Most people in India rely on expensive private healthcare, and either use their savings or insurance coverage to clear their medical bills. As of 2021, over 500 million Indians are covered by various insurance schemes. This has been particularly due to: 

Though more and more people are lowering medical bills by opting for health insurance, not all is well.

Why You Should Be Worried About The 5% GST On Your Hospital Room Rent
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This tax hike can pinch a lot of people who are dependent on private healthcare. Moreover, insurance buyers may have to endure an increase in their insurance premium, as the insurer may also have to bear this additional cost. 

Oh, And One More Thing
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This 5% GST will not be getting an input tax credit as of now, which means that this cannot be adjusted with the final tax you pay.

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Here’s a list of common queries related to GST hike with respect to room rent.


Who will have to pay the GST?

Hospitalisation costs are usually taken care of by the insurer. This means that the GST charges will also have to be paid by your insurance company while settling the claim.

Will the premiums increase?

Though there will be no direct impact on policyholders during claim settlement, if the 5% GST causes a rise in claims cost for the insurers, then health insurance premiums may go up in the near future.

What should policyholders do?

In cases of co-pay, the policyholders  may have to bear a portion of the room rent cost, including the GST amount. To avoid paying the extra cost, it is suggested to purchase a health insurance policy that does have a room rent capping clause. Please read applicable policy wordings for precise details related to this clause.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary news sources on the internet, and is subject to changes. Please go through the applicable policy wordings mentioned in your policy, before making any insurance-related decisions.