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May 22, 2017 05:57 PM IST | Source:

Govt exempts healthcare from GST, industry welcomes move

At the moment healthcare is part of the negative list which keeps its free of any service tax levy.

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The government Friday exempted healthcare from goods and service tax (GST) rates in its final list of rates for services. At the moment healthcare is part of the negative list which keeps its free of any service tax levy.

“As expected, healthcare and education will continue to remain exempt under the GST regime to maintain the affordability of these basic services,” said Priyajit Ghosh, Partner, Indirect Tax, KPMG.

GST will subsume central levies like excise duty on manufactured products and service tax on rendering of services as well as state VAT on sale, to make for a national sales tax that will be levied at the time of consumption of a product or service.

“Since healthcare was always on the zero list the impact of this announcement will be neutral,” said Suneeta Reddy, Managing Director of Apollo Hospitals welcoming the exemption.

“It is well known that the government is taking many steps towards universal health coverage and as such we wait for their position on input taxes with the hope that they are not cost inflationary,” Reddy added.

“Commitment to affordable health reenforced; hope benefits are passed on to patients Healthcare, exempted from GST,” tweeted Bhupendra Singh, chairman of Indian drug price regulator NPPA.

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NPPA has been forefront in Modi’s push for affordable healthcare.

Out of pocket expenditure constitutes more than 60 percent of all health expenses, a major drawback in a country like India where a large segment of the population is poor.

Consulting firm PwC estimates approximately 63 million people fall into poverty each year due to lack of financial protection for their healthcare needs.
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