1. Budget 2016 expectations: Exemption on service tax for hospitals needed

Budget 2016 expectations: Exemption on service tax for hospitals needed

Budget 2016 expectations: a) In terms of Service Tax, it is not righty levied on the medical treatment provided to the patients (other than Cosmetic & Plastic surgery services) the inputs on services availed by the hospital are subject to service tax which also includes inputs for construction of new hospitals.

New Delhi | Published: February 23, 2016 5:59 PM

Budget 2016 expectations: a) In terms of Service Tax, it is not righty levied on the medical treatment provided to the patients (other than Cosmetic & Plastic surgery services) the inputs on services availed by the hospital are subject to service tax which also includes inputs for construction of new hospitals. Since it is the objective of the government to encourage more and more hospitals in the country it is submitted services rendered to a hospital are also kept away from the ambit of service tax. The exemption on service tax on the inputs will reduce the cost to the hospitals and the cost of medical services to a patient

b) In some parts of the country the service tax Department has been taking a wrong view that only services rendered by the doctors to a patient is exempt from service tax and not the services rendered by the hospital.  It is a basic common knowledge that a patient cannot get medical treatment only from the doctors without the infrastructure provided by the hospitals. If both the visiting doctors and hospital charge the patient for the above, how can one contend that only the services of a doctor comes under the exemption from service tax?  Since many hospitals face this threat of unjustified service tax demands, a clarificatory amendment needs to be issued at the earliest.

c) In terms of Custom Duty, one of the aspects which arise in the way of providing good healthcare facility is the availability and usage of good medical equipment.  While India has excellent soft skills in the form of good doctors and nurses, we still suffer from indigenous technological up-gradation in the medical world as a result of which hospitals wanting to provide good medical care have to resort to importation of state of the art medical equipment. However the import duty rates on these equipment used by the hospitals for life saving treatments are very high – ranges in the region of 25%. There is an urgent need to bring down these fiscal rates to a single digit if not total exempting them.
By Dr PM Bhujang, President, Association of Hospital

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