Healthcare chains happy with service tax rollback

New Delhi, Mar 22: Private healthcare chains and diagnostics labs today welcomed the government's decision to rollback the 5 per cent service tax imposed on treatments in private hospitals, saying it will help patients.

"It is a good thing that it has been rolled back. For the patients who were required to pay more, it has come out as a good news," Max Healthcare CEO and Managing Director Pervez Ahmed told PTI.

Expressing similar sentiments, Narayana Hrudayalaya Chairman Devi Shetty said: "I am happy that the Finance Minister has decided to roll back the service tax. I met the FM two weeks ago and at that time he was of the view that the tax would hurt the common man and he would like to do something about it."

Welcoming the decision, Apollo Hospitals Group Chairman Prathap C Reddy said: "Now, with this progressive move to repeal the tax, the country will see our renewed efforts to serve the nation and we will relentlessly persevere to keep all Indians in good health."

Access to healthcare for all and that of the highest standards has been the driving force for the healthcare sector in India and imposition of this service tax would have been a huge deterrent to this vision, he added.

While presenting the Budget 2011-12, Finance Minister Pranab Mukherjee proposed to impose 5 per cent service tax on treatment in private hospitals, paid either by individuals, insurance companies or firms.

Under the proposal, all services provided by hospitals with 25 or more beds that have the facility of central air- conditioning were to be covered under service tax.

He had said that the move was aimed at preventing differential treatment between persons who make payments themselves and others where payments were made by an insurance firm or a business entity.

It was, however, criticised severely by different quarters and was even dubbed misery tax. In the wake of the demand to rollback the proposal, Mukherjee today announced in the Lok Sabha that the step is being withdrawn.

"We greatly appreciate the decision of the Finance Minister to rollback the proposed service tax. This will help quality-oriented healthcare and diagnostics companies to render services to patients at lower costs," Super Religare Laboratories CEO Sanjeev K Chaudhry said.

Expressing similar sentiments, Dr Lals Pathlabs CEO Om Manchanda said: "It is a great news. We welcome the decision."

PTI