September 30, 2022

IMA urges Finance Minister Nirmala Sitharaman to remove GST on healthcare

The Indian Medical Association on Saturday called on Union Finance Minister Nirmala Sitharaman to withdraw the imposition of Goods and Services Tax on health services, saying the measure would increase the cost of running hospitals and clinics around the country.

Referring to a recommendation from the 47th Board of the GST which stated that “like CTEPs, joint biomedical waste treatment facilities for the treatment or disposal of biomedical waste will be taxed at 12% in order to allow them the ITC” , the Indian Medical Association (IMA) said these facilities were previously in the GST exempt category and will be taxed after July 18.

The doctors’ body also cited another recommendation which stated that “room rent, excluding intensive care, exceeding Rs 5,000 per day per patient charged by the hospital will also be taxed at 5%, without input tax credit (ITC). The IMA stated in their letter that this facility is also GST (goods and services tax) exempt and will now fall under GST standards after July 18th.

“We, as the collective voice of all institutions and physicians across the country, express our serious concerns and objections to these new taxes in the health sector. This step will result in significant additional cost to people’s health care,” the IMA letter states.

“We call on you to immediately remove all GST on health services,” he said.

The Association further lamented that the country’s healthcare system is already off track due to low public spending on health, adding that people are largely dependent on the private sector with high out-of-pocket spending.

The decision to add the GST will simply increase base bed rates, he said.

“Taxing the rent of a room in a hospital is taking advantage of the suffering of a patient. It is nothing less than the ‘salt tax’ imposed by the British on Indians which even the father of our nation Mahatama Gandhi had to protest about,” the IMA said in the letter.

Likewise, he said, a sharp 12% increase in biomedical waste is unjustified and will increase the cost of running hospitals and clinics. This will also result in increased costs for patients, the letter adds.

“Enforcing the GST will push health care towards a business model away from being service-centric, and it will not be fair to our citizens who already face many hardships. So it is our heartfelt and immediate request to remove the GST on room rent and biomedical waste in the broader interest of public health care,” the IMA added.