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But GST has now slotted them
compulsorily under the five
percent slab, while categorizing
formulations into the 12 percent
slab (up from nine percent).”
Mr Surana added further, “As a
result of all the above, the increase
in the input costs to the hospitals
have only one way out. They have to
be passed onto the end customers
i.e. the patients. The only relief is
that luxury tax on room charges
has been subsumed into GST and
hence, patients will no longer be
charged a separate luxury tax.”
There are many MedTech startups
that are finding it difficult to
understand the implications.
“Our consumers typically belong
to healthcare sector, which is
exempted from GST. But the
supply chain comprising of
wholesalers and distributors forms
an important link to reach the
ultimate consumers. We will have
to understand how GST will be
applied to the supply chain as well
as the ultimate consumers and it
will affect our company,” says the
CEO of one such company. Few feel
that GST rate of 12% on medical
devices as against lower rate of GST
to allopathic medicines is clearly
discriminatory and needs to be
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BioVoiceNews | July 2017
brought on par with GST applied on
allopathic medicines.
As per Ms Alka Saxena, Financial
Controller, HealthCare atHOME,
“Healthcare services will continue
to exempt under GST regime also,
however cost to the healthcare
service provider would get impacted
with an increase wherever tax rates
fall under category of 18% or higher
rate. On the other side healthcare
sector will be benefitted with GST
due to elimination of multiple
taxation and simplified process of
interstate trading and tax setoffs
particularly in pharmaceutical
products. GST will bring a mixed
effect to the healthcare industry”.
A prominent person from biotech
industry while reacting on the basis
of anonymity termed it a web of
complexities. “It is another burden
for us with tax invoices, reverse
charge mechanism, monthly returns
and several other compliances. I
had thought it would be a simple
procedure but now I come to know
there are several types of GST. Only
time will determine how it will it
turn out for our business.”
Another school of thought terms it
as scaremongering without knowing
the details. Mr Jagdish Rattan,