Apprehending return of service tax for the sector in the upcoming Budget, leading diagnostic chains want Finance Minister Pranab Mukherjee to maintain status quo while seeking incentives for private players to expand in rural India.
Leading firms, Super Religare Laboratories (SRL) and Metropolis Healthcare also said the government must cut duties on chemicals, kits and machines that are used for carrying out diagnostic tests.
Spelling out Budget expectations for the sector, Metropolis Healthcare Ltd Managing Director and CEO Ameera Shah, who is also the co-chairperson of FICCI's Healthcare Committee told that from the last experience government had realised that imposing service tax on diagnostic laboratories can become very harmful to the patients.
"I hope they continue to standby on this decision and keep service tax out of the diagnostics services," she said.
In the Budget for 2011-12, Mukherjee had proposed to impose 5 per cent service tax on air-conditioned hospitals of more than 25 beds and diagnostic chains but it was later rolled back.
Expressing similar sentiments, SRL CEO Sanjeev Chaudhry said diagnostic services should be kept out of the preview of service tax so that the cost of healthcare, including treatment and diagnosis, goes down considerably, benefiting the common man.
"We hope that the upcoming Union Budget benefits the healthcare sector and recognise the role of quality service providers and ensure benefits for accredited laboratories and a strict control on unaccredited ones," he added.
Seeking support for private players to expand in rural India, Shah said diagnostic companies should be given incentives and subsidies.
Government should work closely with national chains to create public-private partnerships model where the private sector can provide services to the public sector to ensure and provide quality and efficient services to people, she added.
Calling for a reduction in the import and excise duties for kits and machines that are used for carrying out diagnostic tests, Chaudhry said: "Current levels of duties and taxes make diagnostics expensive and lead to medical inflation."
Shah said the end sufferer is the patient as diagnostic chains pass on the tax burden to the consumer.
"The simple thing that the government can do is to eliminate taxing on the chemicals so that the benefits get passed on to the patients," she said.
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