ibnlive » Health

Mar 22, 2011 at 07:49am IST

5 pc service tax on healthcare: A misery tax

New Delhi: The 5 per cent service tax on healthcare - that the Government is likely to roll back on Tuesday - would have made the treatment extremely expensive.

Ever since the Government announced a new service tax on healthcare services this union Budget, pressure has been growing to announce a roll back. Noted cardiac surgeon Dr Devi Shetty launched a nation-wide appeal - calling this a ‘misery’ tax.

“India spends less than 1per cent of its GDP on health care..less than 10 per cent of the population can afford heart surgery, or even cancer treatment,” said Dr Devi Shetty, Cardiologist and Chairman, Narayana Hrudaylaya.

“My plea to finance minister is that they're already stretched, lets not burden them further,” said Dr Naresh Trehan, Chairman and MD, Medanta The Medicity.

What does a five per cent service tax entail? CNN-IBN cross-checked with several leading hospitals in New Delhi and Mumbai.

A Bone marrow transplant costs between Rs 10-20 lakhs. With this service tax, costs would shoot up an additional Rs 50,000-1 lakh.

Angioplasty costs between Rs 1.5-3.5 lakh depending on the hospital you go to. With this service tax, patients would have to pay Rs 75,000-1.75 more.

Dialysis can cost anywhere between Rs 1200-3000 per day. With this service tax, that shoots up by Rs 60-150 per day.

The hospitals are not the only ones reacting sharply to the proposed service tax on healthcare, the Indian Medical Association has written an open letter to the prime minister equating this move to the Salt tax levied by Britishers on innocent citizens.

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