Nation Current Affairs 02 Nov 2017 Karnataka: GST, Comp ...

Karnataka: GST, Compensation Cess on ambulances, really?

DECCAN CHRONICLE. | JOYEETA CHAKRAVORTY
Published Nov 2, 2017, 6:15 am IST
Updated Nov 2, 2017, 6:15 am IST
Forget GST, what is the need of this compensation cess,” asked a source sharing the purchase order.
Ambulances with the capacity of 10-13 people, including the driver, now attract top tax rate of 28 percent plus15 per cent cess. (Photo: PTI)
 Ambulances with the capacity of 10-13 people, including the driver, now attract top tax rate of 28 percent plus15 per cent cess. (Photo: PTI)

Bengaluru: Thanks to GST, a bigger and better ambulance with adequate medical provisions built into it for patient care will cost hospitals dear. A recent purchase order made by a city hospital for an ambulance revealed the heavy burden.The total cost of the ambulance was close to Rs 11 lakh. After GST (28%) and Compensation Cess (15%) were added, the price shot up by Rs 5 lakh. “What is the point of the Compensation Cess and GST when it is not even going to be used for personal purposes, and is meant for patients? Forget GST, what is the need of this compensation cess,” asked a source sharing the purchase order.

“The irony is that hospitals pay GST on all purchases and services availed by us, be it rent, telephone bills, outsourced employees, like security and housekeeping, and also on all the equipment/implants and medicines. But as healthcare services are exempt from service tax, hospitals cannot take input credit for the GST paid. It has added to our burden and we are not able to recover it," reveals Dr Ravindra R., Medical Director of Suguna Hospital, who is also the Secretary of the Private Hospitals and Nursing Homes Association (PHANA).

 

Earlier this year, the auto industry body, SIAM, had asked the government to exempt bigger ambulances with a capacity of up to 13 people from 15 per cent cess and charge only 28 percent GST as the finance ministry has exempted compensation cess only on ambulances that can carry up to nine persons.

Ambulances with the capacity of 10-13 people, including the driver, now attract top tax rate of 28 percent plus15 per cent cess. “Ambulances of any capacity are all essential vehicles and not luxury vehicles and are not used for personal purposes like in case of luxury cars. Maybe the government will consider this as various representations have been made," said Dr Ajith Benedict Rayan, Medical Director, HOSMAT. Since services provided by way of transportation of a patient in an ambulance are exempt from GST, hospitals need to rethink purchasing a 10 to 13 seater Ambulance vehicles as well. “There is a strong case for zero-rating of health and healthcare services to make sure input tax credit is available for refund, in the absence of which healthcare service providers will find it difficult to provide services at the current rates,” said Dr Ravindra R.

 

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Location: India, Karnataka, Bengaluru




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