The Centre has decided to levy a 5% Good and Services Tax on hospital rooms with rent above Rs 5,000. This excludes the charges on the intensive care unit of the hospital.
The decision was taken during the 47th Good and Services Tax Council meeting held in Chandigarh on Wednesday.
The meeting was chaired by Finance Minister Nirmala Sitharaman and attended by Minister of State for Finance Pankaj Choudhary and the finance ministers of all states and Union Territories.
The government’s move was criticised by healthcare providers, who said it would put an additional burden on patients, according to Moneycontrol.
No hospital is going to spend the money, said DS Rana, chairperson of Sir Ganga Ram Hospital in Delhi. “Ultimately the patient coming to the hospital for treatment is going to pay for this,” he added.
Shankar Narang, the chief operating officer of Paras Healthcare, said the hike would add to inflationary pressure.
“Since GST is not payable on healthcare services, healthcare service providers are not eligible to avail of credit on the input taxes paid by it, which ultimately become a cost for the service provider,” Narang said.
Over 62% of patients use private health facilities in India, while only 38% avail public health services for in-patient care, BusinessToday.in reported, citing the National Sample Survey.