Service tax on healthcare totally unjustified

The budget proposal to levy a 5% service tax on all services provided by centrally air-conditioned clinical establishments has stirred up a storm. Industry insiders say unless the government supports the sector, healthcare will be unaffordable for 90% of the population.

However, the CBEC Chairman S Dutt Majumder has defended the levy. Said Majumder, “In course of time when the GST is coming, most of the service would be there. So I don’t see any reason. Plus we’re not touching the Aam Janta because the government hospitals are out, less than 25 players and central are out. It was already there last year. But what was there was that it was happening through the insurance scheme. And actually in effect, none was getting any benefit. because insurance companies used to tell the people, that you go and pay it and get reimbursement from us, because if they’re paying it directly there is no service tax, so we were not getting any tax at all, so now at least through the insurance, it will be more facilitative for the people.” Read more…

 

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