New Delhi ,
Passing of GST has a productive effect especially on the healthcare industry. Healthcare sector includes both supply of goods like pharmaceutical companies and supply of services like Hospital, clinics, Diagnostic centres etc. Any increase in cost of these goods
or services will directly impact consumers on day to day basis and will make essential supply expensive.
“The incorporation of all the taxes into one streamlined taxing structure is aimed to raise and ease the way of doing business in the country. Leading to advancements in the manufacturing sector, ‘Make in India’ is likely to see a dramatic enhancements in a short while with the advent of GST. With the withdrawal of CST (Central Sales Tax) in the pharma industry, its overall transaction cost is expected to fall. Implementing GST instead seems a greater advantage for the industry to strategize and rationalize their supply chain, with the added advantage of manufacturing cost reduction.” Says Managing Partner of AKGVG & Associates, FCA Vineet Gupta.
“GST will amass the benefits by reducing the overall costs in the healthcare technology. The current scenario poses extreme tax and duties for the advanced machineries and diagnostic equipments making it costly to import. Moreover under the current tax regulations, tax credit was not sanctioned on the duties levied, which will now be provided for import of equipments and machineries under GST. Impact may be seen on Radiology machineries like X-ray and MRI in the negative side, which diagnostic industry is still under screening for clarity.” Says Managing Partner of AKGVG & Associates, FCA Vineet Gupta.
India poised to become the hub of medical tourism by 2020, GST has a vital role in elevating the chances, due to reduced insurance cost, pharmaceuticals and travel without diminishing the service quality. With complete health care packages, right from travel, e-visa on arrival until accommodation and treatments are available at three-tenth rate as compared to any developed country, India has an added competitive advantage.
In spite of demonetization, the nation’s medical tourism has not only seen an exponential growth but generated revenue and employment, more than ever. Moreover the Ministry of AYUSH has also kept its upper hand to attract foreign patients. The alternative treatment options have provided an important edge over the competitors in Asia, GST implementation has a positive effect on this sector for the growth of medical tourism.
According to CA Vineet Gupta, Areas of concern includes - Under GST regime, the health care services are covered under the bracket of exempt supply & as per law if the output supply is exempted then Input tax credit shall not be available. This leads to make the final service output inclusive of the taxes (becomes a part of the cost) levied on input services taken by the healthcare services like hospitals. The GST council has fixed rate of 5% to 28% tax range on certain healthcare services and products, and due to exemption of supplies of Healthcare service seamless flow of input credit from one supplier to the other is disturbed. In this sector the supply chain is disturbed and the ultimate cost of service increases.And hence, as per his opinion, “the GST structure should either dispose the tax on inward supply of goods and services or tax the healthcare services at 3-5% in order to bring in a refund of the accumulated credit. Implementing this would prove to be the greatest advantage for the healthcare sector and act as a booster for its growth as well as benefits for public at large.”