How is GST Going to Impact your Health?
Passed on 1st July 2017, the Goods and Services Tax (GST) took the country by storm. These taxes have been categorized into five slabs—0%, 5%, 12%, 18%, and 28%. While this tax has taken a toll on a number of products and services; are you aware that even your health care services are impacted by this?
Yes, the GST has affected the health care services in our country. Mentioned below are the details of how GST makes a difference to our health care:
Impact on pharmaceuticals
The newly imposed tax has a rather positive effect on this sector since different taxes levied on it are now merged into a single tax. The pharmaceutical industry had eight different types of taxes, which are now streamlined into one. A 12% tax rate has been fixed on most of the essential drugs, due to which the prices of certain drugs have gone up by approximately 2.29%. However, few drugs like insulin have seen a decline from 12% to 5% on their tax rates, which is good news.
Impact on medical technology
The good piece of information here is that this newly imposed tax has reduced the tax levied on medical technical machinery. Since most medical equipment within our country is imported currently, the taxes on most of these are quite high. Also, with the rolling out of GST, the duty levied on medical equipment is permitted as a tax credit.
While the earlier tax levied on health insurance plans was 15%, with the rolling out of GST, this tax has gone up to 18%, which means a 3% hike. This means that both new and existing policyholders will have to pay an increased premium rate.
Health care treatments and diagnostics
The tax rate on surgeries, which was about 5.5%, now falls under the 12% taxation bracket. Also, the tax on other health care and hospitalization services has undergone a hike, which means more expensive medical bills.
Gymnasiums and other fitness programs
While after the GST, sports goods come under the 12% category, fitness equipment now come under the highest tax category of 28%; although, an appeal has been made to reduce the same to 12%. If this appeal is not accepted, a lot of gyms and fitness centers may soon see lesser customers visiting them.
Although the end impact of this newly introduced tax system is not very clear yet, we hope and keep our fingers crossed that the impact will be a well-balanced one.