Healthcare industry physique NATHEALTH on Tuesday requested the federal government to place into abeyance the just lately introduced 5 per cent GST on hospital rooms with rental worth of above Rs 5,000 per day, terming it a further burden on the sector.
Last week, the GST Council determined that hospital room rents (excluding ICU) exceeding Rs 5,000 per day per affected person shall be taxed at 5 per cent with out enter tax credit score.
“While the phasing away of the exemptions is a laudable goal for it integrates a big half of the worth chain within the tax internet, an important distinction have to be made between phasing out exemptions on the closing output stage and phasing out of exemptions on the inputs/intermediate stage,” NATHEALTH mentioned in a press release.
Failure to recognise this has led to the federal government levying a GST obligation of 5 per cent on hospital rooms with rental worth above Rs 5,000 per day, it added.
While this measure might look innocuous it distorts the design of the GST and imposes a further tax burden on the healthcare sector, the foyer group famous.
The providers within the hospital rooms are an intermediate enter feeding into the general healthcare providers which is at the moment outdoors the GST internet, it mentioned.
Therefore, levying a 5 per cent GST fee on hospital rooms raises the embedded tax burden within the healthcare sector impacting affordability which is a key goal of the National Health Policy,” the industry physique acknowledged.
“Our advice is that the present tax levied on hospital rooms could also be stored in abeyance as within the case of textile sector and must be thought of after the advice of the Bommai committee are obtained,” it famous.
It must be examined within the background of holistic view of the healthcare as a complete which is a crucial sector whose function within the financial system is essential as emphasised in the course of the current covid disaster, NATHEALTH acknowledged.
“Holistic strategy to GST on hospital rooms will even ship the proper sign to international buyers who worth certainty in taxation and coverage modifications that are principally embedded in a bigger coverage narrative,” it added.
(Only the headline and film of this report might have been reworked by the Business Standard employees; the remainder of the content material is auto-generated from a syndicated feed.)
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