With the onset of GST, India’s tax segment has gone a massive change which has been taken a reformative attitude by the people across the country. It is basically one tax with two components – state and central levels. While it has been showcased as the biggest reform in the economy sector since independence, it also faces objections from different political parties because of improper planning and an inadequate resource to handle a sudden change. Every sector, more or less, has been affected by the rolling out of GST. So has the healthcare segment of India.
Health care has been one among the fastest growing fields in terms of generating revenues and employments in the country. The term includes many independent parts that are all together is called a health care unit. It includes essential fields like pharmacy, medical devices, medical insurance, diagnostics, and more. The content discusses every detail that involves in turning the existing scenario of the health care sector.
GST on pharmaceutical Industry:
A major portion of expenditure in healthcare unit relies on costs of drugs. Before GST, the government of India imposed 13% tax on drugs which has been reduced by 1% in the post-GST era. Besides this, the complexity of taxation has also been eliminated by the present taxation system. Therefore, the cost spent on purchasing drugs has been reduced. It can be said that the GST will provide a transparent and effective business to the pharmaceutical industry.
GST on Medical devices and equipment:
Like pharmaceutical sector, medical devices and equipment gets one percent tax benefit under the new regime of GST. In the pre-GST era, medical devices and equipment has 13% tax. This new change is visible and companies related to the industry will definitely earn the most-needed support from Government.
GST on Health Insurance:
Health insurance is a growing concern in the country like India. Many people are showing interest to have health insurance to secure their future from medical expenses. As per the report published in 2016, only 18% people in urban area and 14% people in the rural areas come under the coverage of health insurance. So, the industry is getting bigger with time. 18 percentage GST has been imposed on this industry as compared to the 14 percentage in the pre-GST era. It has a direct impact on the premium amount that policyholders pay every year. The amount will definitely increase.
A hike in diagnostics has clearly been felt in the post-GST as the tax amount has risen from 10-15% to either 12 or 18 percentage tax. The diagnostics like X-rays and MRI will cost you more than what did earlier.
GST has been introduced after analyzing the growth every sector would get under one tax reform policy. It will improve the revenues of the company that has a national impact on the lifestyle and consumer behavior of the country men.