Industry body FICCI has sought zero-rating GST on healthcare services to allow service providers to claim input tax credit.
The chamber's president Sanjiv Mehta said in a letter to the Finance Minister Nirmala Sitharaman, the exemption of healthcare services from GST would not only ensure that the input tax credit chain is intact but will also make compliance easier and ensure that input taxes are not loaded into the cost of healthcare services. '' Therefore, it is our sincere request to have the exemption of healthcare services from GST be discontinued and healthcare providers be allowed to avail of the input tax credit.
The introduction of 5 per cent GST on room rent over Rs 5,000 per day will increase the cost of healthcare for patients, according to the recommendations made in the recent GST Council meeting.
The room rent is usually part of the package rate for a treatment, and taxing only one component of the package will cause confusion and will lead to deconstructing of the packages, which is against the current practice being encouraged by the government, FICCI President said in the letter.
He said that the government has encouraged the private sector to keep informed of the cost of entire treatment through package rates under the Ayushman Bharat-PMJAY scheme and other health insurance schemes.
The hospitals' compliance costs have been increased by these taxes, making the entire compliance process more difficult to understand. This will defeat the government's intention of bringing about ease of doing business, Mehta said.
He noted that the tax rates on inputs goods and services consumed by hospitals have gone up over the past couple of years, including the taxes on some medical equipments.
Mehta said that the incremental cost will not serve the intent of the government to provide affordable healthcare to all patients because of the incremental cost that is ultimately borne by the patients.