The tax department is scrutinising applicability of Goods and Services tax (GST) specifically on medical implants like stents and knee replacements in a move that is likely affect the cost of surgery for Indian patients. In last few days, taxmen have issued preliminary notices to several hospitals across India seeking details. According to the notices, financial details of medicines and implants supplied to IPD (hospital inpatient care) were sought from the hospitals.
The tax notices also demanded “copies of invoices of implants purchased by the hospital and corresponding bill of supply” from the hospitals as per a notice viewed by ET. Tax experts point out that as per the GST framework and some of the later clarifications by the government; medical services were out of the purview of the tax. Some said the taxman is going on a “fishing expedition” that could lead to hospitals dragging the government to court in the coming days. “If GST is applied on medicines and implants used on patients instead of a composite tax rate, then this may result in a huge impact and hospitals will have to challenge this in courts.