Defending the Goods & Services Tax (GST) Council for imposing 5% GST with out enter tax credit score on non-ICU hospital rooms costing above Rs 5,000, income secretary Tarun Bajaj stated the affect of the levy would solely be restricted to some high-end hospitals.
Bajaj additionally rejected the demand for zero-rating for the healthcare business, saying such “carve-outs” could generate comparable calls for from different sectors, like schooling, and put upward stress on taxation of different objects within the GST internet. “I don’t know whether there would be hospitals in smaller towns like Panipat or Meerut where the hospital rooms would be costing Rs 5,000 or above. I would also like to know how many hospital rooms are there in the country and out of those what are the percentage of rooms which are charging above Rs 5,000. I think it will be minuscule,” Bajaj stated at a CII occasion right here. “So if I can spend Rs 5,000 on a room, I can perhaps spend Rs 250 on GST. This GST, which comes into a common pool, will be used for the poor,” Bajaj stated.
The official was “quite perplexed” by the rivalry that the levy can be a success on inexpensive healthcare. In its June 28-29 assembly, the council determined to impose the tax on hospital rooms costing over Rs 5,000/day to widen the tax base.
“I don’t see any reason why there should be any such kind of messaging that 5% GST on Rs 5,000-plus non-ICU rooms is hitting affordable healthcare,” he stated.
In a letter to finance minister Nirmala Sitharaman, business physique Ficci on Monday wrote that 5% GST on room hire above Rs 5,000 would improve the price of healthcare providers to the sufferers. It has additionally requested zero-rating GST on healthcare providers to allow service suppliers to say enter tax credit score.
At current, hospital providers in India are exempt from GST. So, there may be no enter credit score availed on the purchases made by hospitals for the products and providers on which GST is paid within the vary of 5 to 18%.
Source: www.financialexpress.com”