GST Not applicable on Clinical Treatments for Psoriasis and other Dermatological Disorders: AAR [Read Order]

The Kerala Authority for Advance Ruling (AAR) has held that Goods and Services Tax(GST) is not applicable on the clinical treatments for dermatological disorders such as psoriasis, dandruff, dermatitis, anti‑fungal infections, and folliculitis, which qualify as “healthcare services”.

The applicant, Advanced Hair Restoration India Private Limited, was engaged in the business of health care services. The services offered by the applicant were related to skin, dental care and hair restoration.

The applicant wanted clarity on whether its dermatological treatments were eligible for exemption under Notification No. 12/2017‑Central Tax (Rate) as it had provided a nil rate for healthcare services provided by clinical establishments, authorised medical practitioners, or paramedics.

The applicant argued that its services were medical in nature, delivered by qualified dermatologists and healthcare professionals, and therefore fell within the exemption.

The applicant contended that it operates licensed clinics staffed with over 80 medical officers, dermatologists, and para‑medical staff. Treatments offered include management of psoriasis, dandruff, dermatitis, fungal infections, and folliculitis.

These conditions are recognised medical ailments requiring diagnosis and therapeutic care. The applicant maintained detailed patient records, consultation forms, prescriptions, diagnostic reports, and invoices, all evidencing the clinical nature of the services.

It was argued that the exemption under Sl. No. 74 of Notification No. 12/2017 was clearly applicable, as the services were not cosmetic but medical in character.

The two members of the authority, Jomy Jacob( Additional Commissioner of Central Tax)and Mansur MI (Joint Commissioner of State Tax) examined the scope of “healthcare services” under para 2(zg) of the Notification, which covers diagnosis, treatment, or care for illness, injury, deformity, abnormality, or pregnancy in any recognised system of medicine.

It excludes cosmetic or plastic surgery, except when undertaken to restore or reconstruct anatomy or functions affected by congenital defects, developmental abnormalities, injury, or trauma. The Authority also considered the definition of “clinical establishment” under para 2(s), which includes hospitals, nursing homes, clinics, or other institutions providing medical treatment.

The AAR noted that psoriasis is a chronic autoimmune condition, while dermatitis, fungal infections, and folliculitis are medically recognised disorders requiring professional diagnosis and treatment.

The applicant’s clinics were duly licensed under the Kerala Municipality Act and operated as recognised medical establishments. The services were therefore healthcare services, not cosmetic procedures.

The AAR clearly differentiated between medical treatments and cosmetic procedures. While dermatological treatments for psoriasis and related conditions are exempt, services such as hair transplant or purely aesthetic hair‑fixing are not covered.

Cosmetic services aimed solely at beautification, without therapeutic purpose, fall outside the exemption. The Authority cited earlier rulings, including those of the Maharashtra AAR, to reinforce that cosmetic services are taxable unless reconstructive in nature.

The Kerala AAR held that the applicant’s dermatological treatments qualify as healthcare services under Sl. No. 74 of Notification No. 12/2017‑Central Tax (Rate). Accordingly, GST is not applicable on services provided in connection with psoriasis, dandruff, dermatitis, anti‑fungal infections, folliculitis, and similar ailments.

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