GST Helpdesk: An expert answers your questions pertaining to the new tax and its impact

The current GST dispensation for healthcare that keeps the hospital services exempt from GST (which also means that the hospitals will not be able to avail input tax credit) and fixes rates that range from 5-28 pc on medical devices will do little to lower the existing medical costs for the common man. It would have helped if the medical services were zero-rated, like exports, where full tax credit against inputs would be refundable, and all devices were taxed at a standard rate of 5 pc GST. On the contrary, many medical devices have seen higher GST rates than the embedded tax earlier. 

The increase ranges from about 1.5 pc (for devices attracting 6 pc CVD earlier) to 4.5 pc (for devices under nil CVD). Besides, the maintenance cost of the Capital Equipment went up by 3 pc, owing to increase in GST to 18 pc vs previous Service Tax rate of 15 pc. A lower and uniform GST rate of 5 pc, when combined with the antiprofiteering law would have helped to bring down the cost of medical service to patients, and attract investments to the sector and expand reach.