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Budget 2020: NATHEALTH urges govt for zero-rating GST on health services

This saving will be passed on to the end consumers and will lower the cost of care, it added

Press Trust of India  |  New Delhi 

Finance Minister Nirmala Sitharaman
The industry expects that

Healthcare Federation of India (NATHEALTH) on Thursday urged the government for bringing in zero-rating 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 on healthcare services and health insurance premiums", said.

In a joint memorandum with FICCI, said rationalisation of 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," 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.

First Published: Thu, December 26 2019. 17:25 IST