With the implementation of the GST, the tax regime has been changed a lot and the process is unified. Being the biggest change since independence, all the political parties were agreed to this step, but have the problem with the preparedness of implementation. At various stages of value addition, the taxes are implemented to buy the raw materials and manufacturing components.
Relationship between GST and healthcare sector
We will be agreeing with this that today the healthcare industry is the fastest growing sectors of the Indian economy. Definitely, it brings lots of revenue and employment to the people. Being the wider term, it includes medical devices, pharmaceutical, diagnostic, medical insurance and different components required for the medical care.
- GST and pharmaceutical sector
Around two thirds of the expenditure is done on drugs and the burden reaches to 13%. After the GST implementation, it decreases to 12%, including the Ayurvedic drugs. The medicines related to HIV, malaria, TB and diabetes imposed around 5% according to the GST. So, the best thing now is that the cost of purchase is decreased now and the multiple tax burdens are eradicated to increase the business. GST allows hassle free business practiced by the pharma companies.
- GST and medical devices
Under the GST rule, for the medical devices and surgical equipments, the manufacturing unit has to pay 12% of tax. It has been clearly seen the difference of 1% under the new tax rule. Because of this step, boost in the industry can easily be seen.
- GST and health insurance
If we see the scope for health insurance, it is found that it covers only 18% in urban and total of 14% in the rural India. With the introduction of GST, the rate of insurance sector now reaches to 18% as compared to the previous one that is limited to only 15%. This shows that there is an increase in health insurance premiums.
- GST and diagnostics
The rise in the rates of diagnostic tests is understandable. Whether it is blood tests, X-Rays, strip based diagnostics or MRI, these are kept under the 12 or 18% slab that is much higher than pre GST tax rate structure. By doing this, revenue of the Indian Government has certainly increased, but the transparency is maintained likewise that can help in simplifying the tax structure. As the expectation of the economical growth can easily be seen, different sectors are also facing the increase. The health care experts were confident about the positive outcome of the GST and they beautifully welcome the strategic change and create a positive environment. This happened by removing all the obstacles coming in the way of health care growth.
India is counted as the largest producer for generics and in term of pharmaceutical it is stepped on the 3rd position. Hence, the introduction of GST reduces the overall cost of the technology by presenting tax regulations. Overall, it is a win-win situation as healthcare industry started getting the handsome profit after the implementation of the GST.