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Pranab may roll back service tax on healthcare

CNN-IBN
Mar 07, 2011 at 06:46pm IST

New Delhi: Service tax on healthcare, introduced in the Union Budget 2011-12, is likely to be rolled back. Finance Ministry sources have told Network18 that the five per cent tax is likely to go.

The rollback could be announced by Union Finance Minister Pranab Mukherjee on March 22, during his reply to the Finance Bill. The Finance Bill will be taken up in Parliament on March 21 or 22.

Sources say the Congress-led United Progressive Alliance Government is examining alternate sources of revenue. The tax had come in for widespread criticism with ace cardiac surgeon Dr Devi Shetty calling it a misery tax.

Pranab may roll back service tax on healthcare

The rollback could be announced by the Finance Minister during his reply to the Finance Bill.

The Healthcare service tax was to mop up Rs 500 crore.

Mukherjee in the Union Budget for 2011-12 proposed to impose a service tax of five per cent on all services, including diagnostic services, provided by a centrally air-conditioned clinical establishments having more than 25 beds for in-patient treatment.

Besides, the service tax would also be levied on services provided by consultant doctors operating from premises of such hospitals.

However, healthcare services provided by government hospitals and those run by municipalities will not attract the new levy.

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