Budget FY24: NATHEALTH seeks rationalisation of GST for healthcare sector

Healthcare industry body NATHEALTH on Wednesday sought rationalisation of GST and enhanced insurance coverage especially in smaller cities and towns in the upcoming Budget.

In its submission to the finance ministry, the industry body noted that unlike other sectors, the healthcare sector has not been able to derive the benefits of the GST transition.

In fact, the embedded taxes in the healthcare sector have increased in the post-GST regime compared to pre-GST period, it stated.

NATHEALTH has proposed imposition of 5 per cent merit rate on the output healthcare services for all healthcare establishments (both private and government) with the option to claim full input tax credits.

The other option can be levying 5 per cent GST rate on output services for all private hospitals and an optional dual rate structure for government healthcare establishments, it added.

Presently GST is exempt on the healthcare services. NATHEALTH recommends imposition of 5 merit rate on these services as this would allow healthcare service providers to claim input tax credit, thereby lowering their embedded taxes burden.

NATHEALTH also sought clearance of working capital arrears both for providers and procurement organisations.

''It is imperative to build infrastructural capabilities so that people have greater access to quality and critical healthcare services. Viability gap funding by the government is essential to set up hospitals in tier-1 and tier-2 cities, encouraging increased investment in the healthcare infrastructure,'' NATHEALTH President Shravan Subramanyam said.

Uniform adoption of Ayushman Bharat Digital Mission is another imperative which calls for clearly defined delivery models for innovative modules developed by private players, he added.

''If all payment backlogs both for providers and suppliers under insurance and public procurement are cleared, it would significantly improve the availability of healthcare infrastructure,'' Subramanyam said.

NATHEALTH also sought an increase in budgetary allocation for the health sector.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)