GST ON HEALTHCARE SERVICES- A BITTER PILL TO SWALLOW

The Healthcare Industry has grown significantly and enjoys an important position in the global medical field. As the population grows, the demand for better healthcare services also rises, and so do healthcare expenditures and tax revenues.

Healthcare services were not subject to service tax before the introduction of the GST regime. They are now for the first time covered by GST as the council decided to levy 5 percent GST without input tax credit on hospital rooms exceeding Rs 5000 per day, excluding ICUs.

Most health care services are exempt from the current GST. Although the recent notices being issued to hospitals and the intent of the taxmen to levy a tax on implants or medicines, etc., might increase the cost of medication and surely cannot be justified under the interpretation of GST law.

A rate hike would to some extent contribute to inflationary pressure and increase the burden on the common man. For hospitals that charge GST on room rent, the tax credit should be available. As health care services are not subject to GST, the health care service providers are not eligible to claim credit for input taxes paid, which becomes a cost to them.

Human health is the most important aspect of life and there are a lot of people who can’t afford it because of the expensive treatments and medicines. Experts believe that GST on hospital beds will burden middle-class patients. Healthcare should receive the most subsidies and GST exemptions in order to make it affordable and accessible for the last man standing.

A hospital stay is not a luxury. The choice is not like staying in a five-star hotel. Generally, people from certain economic backgrounds choose private hospitals over government hospitals due to the quality and convenience they provide.

Thus, healthcare services should be exempt from the GST regime.