‘Extra burden’: Hospital association protests 5% GST on room rent

'As hospitals are already facing severe financial sustainability issues, they will pass on this burden to patients'

An association of hospitals on Thursday protested against the GST Council’s decision of imposing 5% goods and services tax on hospital bed rents costing more than Rs 5,000 per day (excluding the ICU), observing that hospitals would have no other option but to pass on the burden to the patients.

“This is an issue of serious concern as it will put an extra financial burden on hospitals. Considering that hospitals are already facing severe financial sustainability issues, they will have no option but to pass on this burden to patients,” Association of Healthcare Providers (India), representing a vast majority of private hospitals said in a statement.

The GST Council in its 47th meeting at Chandigarh earlier this week has recommended that room rent (excluding ICU) exceeding Rs 5,000 per day per patient charged by a hospital shall be taxed to the extent of 5% without the input tax credit.

“There has never been a GST on beds, or diagnostics. The bed charge is part of care for the patient. We are worried that next will be a treatment like surgery. This is sending wrong signals to the providers of healthcare. It will enhance costs for patients and insurance,” Girdhar Gyani, director general of AHPI told DH.

Currently, GST is levied on pharmacy and medical equipment as they are part of the sale. But patient care was always kept out of the purview of the indirect tax.

“On one hand the government has been voicing concerns on making healthcare services affordable, while on the other it is putting extra burden through taxation of such kind. Hospital beds are not hotel beds. Patients do not come for business or recreation but to address health issues,” Gyani said.

The association called upon the Union Finance Minister to withdraw this recommendation, noting that there are factors considered by hospitals to determine the bed charge.

The GST Council’s decision attracts criticism from political parties with Congress dubbing the decision as an “anti-people” move.