Pre Budget Expectations - Healthcare Sector - Dr. P. M. Bhujang, President, Association of Hospitals

"The import duty rates on medical equipment used by hospitals for life saving treatments are very high and ranges from 24% to 26%. There is an urgent need to bring down these fiscal rates to a single digit if not total exempting them."

"He also indicated that the government must encourage to build more and more hospitals in the country and to do so the government must keep the services rendered to a hospital away from the ambit of service tax. The exemption on service tax on the inputs will reduce the cost to the hospitals and consequently cost of medical services to a patient. Moreover VAT on medicines, implants and consumables used for patients in the hospital in the course of his/her treatment should not be applicable since those are obviously not sold separately."

"In some parts of the country the Service Tax Department is of the view that only services rendered by the doctors to a patient is exempted from service tax and not the services rendered by the hospital. A patient cannot get medical treatment only from the doctors without the infrastructure provided by the hospitals. For instance, for conducting a surgery an operation theatre is needed by a surgeon to do the necessary surgery. Many hospitals face this threat of unjustified service tax demands, a clarification circular / amendment needs to be issued at the earliest." he further added.

Source : Equity Bulls

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