Ministry calls for lowest GST bracket for healthcare sector

New Delhi: Aiming to provide affordable healthcare services to all, the Health Ministry has urged Finance Ministry to bring all healthcare facilities, including medical devices, under the 0-5 per cent Goods & Services Tax (GST) net. The move has been initiated on the diktat of hospitals and diagnostic centres, who have threatened to increase the cost of treatment and investigation procedures.

"The Health Ministry has submitted its request to Finance Ministry citing changes in prices of investigation procedures, medical devices after the bringing healthcare services under 12 per cent GST slab from earlier 5 per cent," a senior official said.

"Since making any changes in GST slab can be only done by Finance Ministry, we have requested to consider the request in the larger interest of patients," the official said, adding that 'best would done' to provide affordable healthcare services.

Given that disposables, drugs and reagents being bracketed under 12 per cent GST, the cost of surgeries and other procedures (that involve use of disposables and reagents) has gone up. The old tax rate for these items varied between 2 per cent to 5.5 per cent.

The services which face increased taxation due to GST are dialysis as the tax on it has been increased to 12 per cent from 5 per cent. Similarly, the pacemaker which was under the tax net of 5.5 per cent has been shifted to 12-18 per cent GST tax bracket.

The prices of support devices in orthopaedics have also been increased as the device has been brought under the 12 per cent GST slab from 5 per cent and all support devices for cancers except blood cancer have been brought under 7-12 per cent GST slab from 5 per cent tax bracket. Ancillary medical procedures and diagnostics, which play a key role in treatment, have been put under the 12 per cent and 18 per cent slab respectively.

"Given that the increased tax burden has not been shifted to patients, healthcare service providers are paying the increased tax of its own. It's not possible in the long run and when the healthcare service providers would start charging the increased tax from patients, it would become difficult for the Health Ministry to provide health services at affordable prices," an expert said.