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(Service Tax on Medical Care):

Sweets are dead against for diabetics hence the budget 2011 has brought bitters so that nothing to worry except of paying more tax. Any service provided or to be provided to any person by a “clinical establishment”; or by a doctor, not being an employee of a clinical establishment, who provides services from such premises for diagnosis, treatment or care for illness, disease, injury, deformity, abnormality, or pregnancy in any system of medicine is subject to service tax @ 10.3% with effect from 1st April 2011.

Clinical establishment means a hospital, maternity home, nursing home, dispensary, clinic, sanatorium or institution, by whatever name called, owned, established, administered or managed by  any person or body of persons, whether incorporated or not, having in its establishment the facility of central air-conditioning either in whole or part of the its premises and having more than twenty five beds for in-patient treatment at any time during the financial year, offering services for diagnosis, treatment or care for illness, disease, injury, deformity, abnormality or pregnancy in any system of medicine; or an entity owned, established, administered or managed by  any person or body of persons, whether incorporated or not, either an independent entity or as a part of any clinical establishment referred above which carries out diagnosis of diseases through pathological, bacteriological, genetic, radiological, chemical, biological investigations or other diagnostic or investigative services with the aid of laboratory or other medical equipment, but does not include an establishment, owned or controlled by the government or a local authority.

The government is searching continuously for new avenues to tax under services tax. Instead levying service tax on this medical service (life saving and vital service), the government can reconsider the same and may charge heavy tax on liquor and tobacco products which creates the considerable amount of diseases in India. Here liberty is given to possess diseases and taxed when it was cured or attempt made to cure.

I really scared because the government may say our education, walking, living could be subject to service tax soon. If the task of the government is reducing the population then, I agree with the government but remember, not even single farmer will be alive to save other survivors

It is a tip of the iceberg which needs to be blown by each one of citizens of India. Because no hospitals going to bear the service tax burden, it is ultimate burden the people of India. We all know the concept of “Do or Die” that was an old saying but now it’s time to rephrase the same “Pay or Die!” It is remain unknown to many and a very true statement that 80% of the wealth of a nation will be in the hands of 20% of the population. The said 20% population owns the hospitals covered under service tax said above and the remaining 80% populations substantially going to face the consequences of tax burden.  It is like; forcefully sucking blood in the name of blood donation from the persons those who are does not have sufficient enough to donate. Whenever the government wants the put hand on the new packets where there are sufficient problems. If they wanted to tax the hospitals, they may charge higher rate of income tax and collect from the revenue earned by those hospital. The reason why they have not done it is that the 80% of population will never ask for anything against the government. We have enough weapons of laws and procedures and complicated policies to confuse the common man.


As a developing nation we should have good education system and medical care. It may be one of the reason for taxing the medical care is to direct the people of India to the get treatment in government hospitals, but we are sure that when care taken in government hospitals are good and sufficient, no one will step into the private hospitals, the mistake lying on the government part.

Could anyone understand what is going on?………. Whether my understanding is wrong?..........


Published by

Selvakumar Selvaraj
(Chartered Accountant)
Category Service Tax   Report

2 Likes   58 Shares   17079 Views


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