It is anticipated that the cost on imports of medical equipment may come down marginally

The healthcare industry has been exempted from the goods and services tax altogether and no GST can be levied on healthcare services by a clinical establishment. Hence, it can be said that the healthcare sector is insulated from GST, except for the software application front where tweaking is required in the application to accommodate the statutory requirements. The only area where GST will have some impact is the hospital sector and it is on the amount of taxes levied on cosmetic services, which has been increased from 15 per cent to 18 per cent.

It is anticipated that the cost on imports of medical equipment may come down marginally. The pharma sector will be benefited by the implementation of GST as the tax structure would be considerably simplified. This in turn will lead to better operational efficiency and streamlining of supply chain.

It will take some time for the vendors and manufacturers to ascertain the impact of GST on their margins and their manufacturing costs. Once they are able to ascertain the impact of GST on their margins then they need to decide whether to pass on the benefits/ losses to the end users. It will probably take a couple of weeks for the vendors and manufacturers to ascertain their costs and margins as applications are not fully modified to comply to GST.

Hence, the real impact on the end user or patients, in case of the hospital industry, will be clear in a few weeks once the vendors and manufacturers are able to ascertain their profit margins. Data will get uploaded on government portals and further detailed clarification will be received from the government on a micro level.

Girish Koppar, Secretary – Hospital Information Technology Association