Healthcare Federation of India (NATHEALTH) on Thursday urged the government for bringing in zero-rating GST for healthcare services and making it a priority sector to meet its long-term funding and financing requirements.
In its pre-Budget recommendations, the apex industry body also called for building capacity in tier-II and III cities which will cater to the growing demands of quality healthcare in rural areas as well.
The industry expects that "the Union Budget 2020-21 will be announced keeping in focus the incentives for medical value tourism, zero-rating GST on healthcare services and health insurance premiums", NATHEALTH said.
In a joint memorandum with FICCI, NATHEALTH said rationalisation of GST for healthcare input services would lead to unlocking of the differential input credit and will ease costs for all healthcare providers including nursing homes, clinics, hospitals and diagnostic centres.
This saving will be passed on to the end consumers and will lower the cost of care, it added.
"Since GST is not payable on healthcare services, healthcare service providers are not eligible to avail credit on the input taxes paid by them, which ultimately becomes a cost for the service provider. Under the current GST regime, the net impact of revised tax rates on inputs (goods and services) consumed by hospitals has increased," NATHEALTH President Sudarshan Ballal said.
As this incremental cost is ultimately borne by the patients, it defeats the intention of the government to provide affordable healthcare services, he added.