Healthcare industry body seeks suspension of 5 per cent GST on high rental hospital rooms

Lobby group NATHEALTH said the 5 per cent GST distorts the design of the GST and imposes an additional tax burden on the healthcare sector.

Published: 05th July 2022 07:44 PM  |   Last Updated: 05th July 2022 07:44 PM   |  A+A-

hospitalroom

Image used for representational purposes only.

By PTI

NEW DELHI: Healthcare industry body NATHEALTH on July 5 asked the government to put into abeyance the recently announced 5 per cent GST on hospital rooms with rental value of above Rs 5,000 per day, terming it an additional burden on the sector.

Last week, the GST Council decided that hospital room rents (excluding ICU) exceeding Rs 5,000 per day per patient shall be taxed at 5 per cent without input tax credit.

"While the phasing away of the exemptions is a laudable objective for it integrates a large part of the value chain in the tax net, a crucial distinction must be made between phasing out exemptions at the final output stage and phasing out of exemptions at the inputs/intermediate stage," NATHEALTH said in a statement.

Failure to recognise this has led to the government levying a GST duty of 5 per cent on hospital rooms with rental value above Rs 5,000 per day, it added.

While this measure may look innocuous it distorts the design of the GST and imposes an additional tax burden on the healthcare sector, the lobby group noted.

The services in the hospital rooms are an intermediate input feeding into the overall healthcare services which is currently outside the GST net, it said.

Therefore, levying a 5 per cent GST rate on hospital rooms raises the embedded tax burden in the healthcare sector impacting affordability which is a key objective of the National Health Policy," the industry body stated.

"Our recommendation is that the current tax levied on hospital rooms may be kept in abeyance as in the case of textile sector and should be considered after the recommendation of the Bommai committee are received," it noted.

EDITORIAL | After five years of GST, some hits and many misses

It should be examined in the background of holistic view of the healthcare as a whole which is an important sector whose role in the economy is crucial as emphasised during the recent covid crisis, NATHEALTH stated.

"Holistic approach to GST on hospital rooms will also send the right signal to foreign investors who value certainty in taxation and policy changes which are principally embedded in a larger policy narrative," it added.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp