IMA urges FM Sitharaman to grant GST exemption to healthcare services

Indian Medical Association (IMA) on Saturday wrote a letter to Union Finance Minister Nirmala Sitharaman requesting to grant exemption in Goods and Services Tax (GST) for healthcare services.

Citing in a letter, IMA mentioned that the 47th GST Council meeting has recommended that "Like CTEPs, common bio-medical waste treatment facilities for treatment or disposal of biomedical waste shall be taxed at 12 per cent so as to allow them ITC."

IMA said these facilities were earlier in the GST exempted category and will be taxed post-July 18.

47th GST Council meeting has also recommended that "Room rent, excluding ICU, exceeding Rs 5,000 per day per patient charged by the hospital will also be taxed at 5 per cent, without ITC."

The IMA said, in its letter, that this facility was also GST exempted category and was to be effective from July 18.

"We, as the collective voice of all establishments and doctors of the country, express our serious concerns and objections to these new taxes in the healthcare sector. This step will add big additional cost to the healthcare of people," IMA said.

The letter mentioned that the decision is unfortunate and unfair to the people of the country and decision without input tax credits is going to raise the healthcare cost.

"The medical body requests to immediately withdraw any GST on healthcare services," it said.

IMA in its argument said the healthcare system of the country is already not on track owing to meagre government spending on health, adding people largely are dependent upon the private sector with high out-of-pocket expenditures.

The decision of adding GST will simply raise the basic bed rates. Keeping rates below 5,000 will compel augmentation of other charges for feasibility.

"Increasing the government revenue through burden on public healthcare is not fair. The wrongly structured healthcare insurance sector is unable to address its aims and objectives," the letter read.

People still suffer due to co-pay and out-of-pocket expenditures. If people are pushed below the poverty line due to healthcare expenses, how justified is this decision to slap GST on bed charges? the letter asked further.

IMA said to keep the decision without input, credit is unfair for the healthcare and the learned professionals.

Raising bed charges by applying GST will undeservingly paint doctors with a blot while the onus of rising healthcare expenditures will stand with the government only, it said.

Letter undersigned by IMA President Dr Sahajanand Prasad Singh suggested that it will be correct to keep healthcare away from GST.

If not possible, the input tax credit is a must to curtail the rise in healthcare costs. The application of GST is pushing healthcare towards a business model away from a service-centric one.

As per the letter, IMA requested Sitharaman to withdraw GST on room rent and biomedical waste in the larger interest of public healthcare.

"Similarly, a steep rise of 12 per cent in biomedical waste is unjustified and it will raise the cost of running hospitals and clinics. It will further translate into raised charges for the patients. It is not reasonable to burden patients with more charges in these difficult times," IMA cited.

IMA also request an urgent meeting on these serious issues and a hold of GST imposition on room rent and biomedical waste in the meantime.