GST: Your Private Health Care Costs Might Increase

Good and Services tax, popularly known as GST is a comprehensive, multi-stage and destination-based tax that will be levied on every value addition. Even though healthcare and education is not included in this raise, the price of the drugs, equipment and AP's will experience an increment once the tax comes into effect. Since Active Pharmaceutical Ingredients (APIs) will be taxed at 12 per cent, this would have a trickle-down effect. Additionally, a non-profiteering clause that is applicable on healthcare and education makes it mandatory for input tax credit benefits to be passed to customers. 

According to Apollo Hospital chairman Prathap Reddy, private hospitals may be able to absorb the rise of up to 2% without impacting the patients. However if the surge is more than 2% it is bound to affect the customers. "There is no GST for us but there are services and some products with GST rate ranging from 15 to 18 per cent that have fallen on us," Reddy said in reply to a question by PTI.
 

The chairman said private sector hospitals are already struggling due to the Central Government Health Services (CGHS) and ESI tariffs. About 30 per cent of the business of private hospitals comes from the government through CGHS and ESIC and the plan to cap prices of more such devices such syringes, cannula, catheters, etc would make us a "government control" country. The medical tourism in the country due to the possible upsurge of the health care costs could get negatively affected. More details are awaited.
The GST Plan will be launched from 1st of July this year.

Also read Amendments to Karnataka Medical Bill Aimed At Bettering Healthcare

(Inputs from PTI)