FM promises to respond on healthcare service tax

Amid concerns by medical community on the proposed service tax on healthcare, Finance Minister Pranab Mukherjee today said in the Rajya Sabha that he would respond to the representations on tax issues next week.

Following the reply of Mukherjee on general discussion on the Budget, the Rajya Sabha returned the Appropriations Bills, completing the first phase of the three-stage exercise for passage of the budget.

The Lok Sabha had earlier approved the Supplementary demands for grants for 2010-11 and relevant Appropriation Bills.

"That can be announced or decided only at the time of Finance Bill. Therefore I will request those who are agitating to wait till the Finance Bill is being approved by Parliament", he said while referring to his proposal to impose 5% service tax on high-end health care.

The Finance Bill is likely to be considered by Parliament next week. The budget session of Parliament would conclude on March 25.

Mukherjee in the budget for 2011-12 proposed to impose a service tax of 5% on all services, including diagnostic services provided by a centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.

The proposal evoked sharp reaction from the medical community which described the service tax on healthcare as "misery tax". They have also submitted representation against the proposal to the Finance Minister.