The healthcare service providers today asked the government to roll back the proposed service tax on treatment in private hospitals and tests in diagnostics labs, saying the move will only burden the common man.
"There are two issues I foresee as a consequence of service tax -- cost of healthcare goes up thereby adversely affecting common man and given the unorganised nature of the industry, it is going to be very difficult for healthcare service providers to administer," Dr Lal Path Labs Chief Executive Officer Om Manchanda told PTI.
Hence, the service tax proposal should be rolled back, he added.
Finance Minister Pranab Mukherjee, in his budgetary proposals, has imposed 5% service tax on treatment in private hospitals, paid either by individuals, insurance companies or firms. The same levy would be applicable to diagnostic tests of all kinds.
This will, however, not be applicable to government hospitals.
"The Union Budget has levied service tax on hospital and diagnostic service providers and with this the end user, the patients, will end up paying much more than earlier," Apollo Hospitals Group Chairman Prathap C Reddy said.
Apart from the service tax on hospitals and diagnostics centres, the Union Budget for 2011-12 has also raised excise duty on medicines and medical equipment from 4 to 5% which could pave the way for medicine price increases.
"The government should roll back excise duty on medicines and MAT on SEZs if it considers healthcare a priority industry," Pfizer MD Kewal Handa said.
Further, pharmaceutical industry also fears imposition of Minimum Alternate Tax (MAT) on Special Economic Zones would adversely impact their profits, since most export units of drug firms are located in various SEZs.
