CII, FICCI welcome withdrawal of service tax on healthcare

March 22nd, 2011 - 10:34 pm ICT by ANI  

Pranab Mukherjee New Delhi, Mar 22 (ANI): The Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (FICCI) have welcomed the decision of Union Finance Minister Pranab Mukherjee to roll back the proposed five percent service tax on healthcare services.

“FICCI welcomes the decision of the Finance Minister to roll back the proposed 5% service tax on Healthcare services provided by hospitals as well as diagnostic centers. This will remove an important deterrent in providing quality healthcare services at affordable cost to the patients”, said Dr. Narottam Puri, Adviser, FICCI Health Services Committee & Chairman, NABH.

Meanwhile, Chandrajit Banerjee, Director General, CII, in a statement today said: “CII welcomes the changes made in the Finance Bill by the Finance Minister before its passage in Parliament. The withdrawal of 5% service tax on healthcare services and the increase in the abatement on readymade garments were both recommendations made by CII in the post-Budget memorandum.”

Union Finance Minister Pranab Mukherjee earlier today announced the withdrawal of five percent service tax on healthcare.

He also introduced a Constitution Amendment Bill in the Lok Sabha to facilitate implementation of the Goods and Service Tax (GST), an indirect tax regime that would subsume levies like excise, service tax and sales tax.

The Bill seeks to amend the constitution with a view to confer simultaneous powers on the Centre and State Governments to levy taxes on goods and services.

The statement of objects and reasons of the Bill said: “The GST would replace a number of indirect taxes presently being levied by the central government and the state governments and is intended to remove cascading of taxes and provide a common national market for goods and services.”

The Bill provides for creation of a GST Council to be headed by Mukherjee.

The Finance Minister told Parliament that the service tax, termed ‘misery tax’ by its detractors, would be reexamined before the introduction of Goods and Service Tax (GST).

“The proposed levy on healthcare has raised considerable anxiety in this House and outside. The purpose of the new levy was not nearly to not mobilize revenue; it was to pave the way for the introduction of the goods and services tax (GST). However, I have decided to examine the new levy in its entirety, both in the respect of services provided by hospitals as well as by way of diagnostic tests until GST comes into force,” said Mukherjee.

The GST, which is considered to be a major tax reform, has been pending for the last four years over differences between the Centre and some States over the structure of the new tax regime. (ANI)

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