The government is likely to withdraw the service tax imposed on healthcare services in the Union Budget for 2011-12 following a strong reaction from the public and the medical fraternity.
“A review is on…Th
e government is looking at a rollback,” a finance ministry official said.
Finance minister Pranab Mukherjee had proposed to levy a 10% service tax, with an abatement of 50%, on treatment carried out at hospitals with 25 or more beds with central air conditioning and diagnostic test services.
As of now, service tax is levied only on health check-ups carried out by hospitals for employees of business entities and health services offered under insurance schemes.The Indian Medical Association has demanded withdrawal of the proposal in an open letter addressed to Prime Minister Manmohan Singh. “Such efforts of the government to earn revenue from the misery of its citizens remind us of the salt tax imposed by the British regime on innocent citizens,” the open letter said.