The 5% GST on non-ICU hospital rooms costing above Rs 5,000 will not affect the affordable healthcare for a large chunk of the society, stated a top official. Mr. Tarun Bajaj, Revenue Secretary. He rejected the demand for zero-rating for the healthcare industry, stating that such “carve-outs" may generate similar demands from other sectors, like education, and put pressure on taxation of other items in the GST net. 

A letter to the finance minister addressed the issue of 5 % GST on non-ICU hospital rooms above Rs 5,000 will increase the cost of healthcare services. Hence, the GST council removed the exemption on this category of hospital rooms last week. Mr. Bajaj stated that in small towns, there are hardly any hospitals that charge Rs 5,000 or more per day as rent for non-ICU rooms. He said, “I don′t know if there would be any hospitals in smaller towns like Panipat or Meerut where the hospital rooms would be costing Rs 5,000 or above. I would also like to know how many hospital rooms are there in the country and out of those what is the percentage of rooms which are charging above Rs 5,000?”

The secretary stated that he was surprised by the levy that this new rule will provide. He added that this small portion would be a bolt on affordable healthcare.