Scope for further pruning of GST exemption list: Revenue secy Tarun Bajaj

Revenue Secretary Tarun Bajaj on Tuesday said there was scope for further pruning of the GST exemption list and expressed hope that the “rough edges” in the indirect tax regime will be ironed out in the next 2-3 years. He further said that the rise in GST collection was on account of multiple factors, like increased economic activity post-Covid, and better compliance, besides inflation. The 5 per cent GST on non-ICU hospital rooms costing above Rs 5,000 will not hit affordable healthcare for a large section of people and the impact of the levy would only be miniscule, 

Bajaj said. “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 poor,” he said.

Responding to the representations of the industry, Bajaj also rejected the demand for zero-rating for healthcare industry saying such “carve-outs” may generate similar demands from other sectors, like education, and put upward pressure on taxation of other items in the GST net. Industry body Ficci in a letter to the finance ministry on Monday said that 5 per cent GST on non-ICU hospital rooms above Rs 5,000 will increase the cost of healthcare services.