Urges the government to increase the tax holiday for establishing healthcare facilities from the current period of five to ten years in non-metros
NATHEALTH (Healthcare Federation of India) has presented pre-budget recommendations to the government to exempt the healthcare services from Goods & Services Tax or GST.
Anjan Bose, Secretary General, NATHEALTH said that GST once implemented, would put various sectors under the purview of service tax. Healthcare is currently exempted from service tax and this should continue after the GST regime at least for a period of ten years and only thereafter should a decision to levy service tax be considered, after assessing the status of healthcare coverage, costs and performance on key healthcare metrics. Levying service tax on healthcare services and facilities will be a retrograde step which will push back the agenda to provide universal healthcare. The current stage of development of the healthcare industry cannot afford levy of service tax.
Bose emphasised, “Given the long payback period, extension of the tax holiday to ten years instead of five will improve the business case for investment. The lack of skilled healthcare resources in non-metros and tier II, III, IV cities makes the payback period even longer”.
Highlighting the need to focus on preventive healthcare, Bose stressed that in order to achieve the government’s stated objective of Universal health coverage, the tax exemption on Preventive Health checkup should be raised from the current Rs 5000 to Rs 20000 under section 80-D of Income Tax Act 1961.
NATHEALTH recommends the government to withdraw service tax on health insurance premium which acts as a deterrent to consumers. Healthcare is not taxed for services so the same principle should be applied for healthcare financing as well added Bose.
Sushobhan Dasgupta, President, NATHEALTH informed, we have urged the government to increase the depreciation rate applicable on medical and pathological equipment and medical devices from 15 per cent to 30 per cent.
At present corporate income tax incentives is given on capital expenditure for hospitals with 100 beds and above, which needs to be revised for Greenfield Hospitals with 50 beds. This initiative will extend benefits to smaller facilities and will encourage set up of more much-needed healthcare facilities in tier II, III and IV cities, added Dasgupta
“We appeal to the government to come out with policies that will enable the environment to fund long-term growth and help develop/optimise healthcare infrastructure,’ said Dasgupta
“The government should set up a healthcare infrastructure fund and a medical innovation fund which would encourage entrepreneurship and newer business models which are the need of the hour for improving access, availability and quality, especially in tier II and III and rural areas,” said Dasgupta.
To bolster skill development in healthcare, the government needs to consider introducing special incentives for health sector skill development and make it easier to collaborate with eminent overseas training partners. This would necessitate increased budgetary provisions for healthcare sector skill council and relaxation of taxes on training aids and import of training materials said Bose.
Considering the huge demand and supply gap of doctors, health sector needs strong incentives to set up medical colleges. Free and concessional land in setting up private medical colleges will incentivise more players to get into medical education. To encourage quality and innovation govt. should provide a longer term (10 year window) for 250 per cent deduction of approved expenditure on R&D activities.
Anjan Bose said, “We are hopeful that in the upcoming budget the government will consider the recommendations for the entire healthcare value chain, which will result in progress of Indian healthcare sector.”
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