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Industry Urges Indian Hospital Tax Roll Back

by Mary Swire, Tax-News.com, Hong Kong

11 March 2011


A leading Indian trade body has expressed disappointment at the budget proposal to levy a 5% service tax on treatment at air-conditioned private hospitals (with more than 25 beds).

The Federation of Indian Chambers of Commerce (FICCI) has appealed to the Finance Minister Pranab Mukherjee to roll back the tax as it believes that it will compromise quality and safety measures.

A service tax on health check-ups or treatments was imposed in 2010-11, however the Finance Minister said that this levy had resulted in differential treatment between those making payments themselves and those having their treatments paid by insurance companies or their employers.

FICCI says that air-conditioning is no longer a luxury and is essential for the high-quality treatment of patients today. This is confirmed by the fact that the Indian National Accreditation Board for Hospitals does not accredit hospitals without central air-conditioning.

The levy has also been extended to diagnostic tests of all kinds, and FICCI believes that this will deter preventive healthcare and inevitably lead to an extra burden on secondary and tertiary treatments.

TAGS: tax | business | India | insurance | budget | health care

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